US systems unravel under Trump

Summary

The Rachman Review

Episode: US systems unravel under Trump

Date: February 13, 2025
Host: Gideon Rachman (Financial Times)
Guest: Daniel Dresner (Professor, Fletcher School at Tufts University, Specialist on Economic Statecraft)

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Overview

This episode delves into the dramatic changes in American domestic and foreign policy in the second Trump administration. Gideon Rachman and guest Daniel Dresner discuss the administration's aggressive trade tactics, the shutdown of key government agencies, growing unpredictability in international alliances, Elon Musk’s involvement with federal payment systems, and the fragility of checks and balances in US governance. The conversation considers far-reaching consequences for the global order, America's allies, and internal stability, offering a sobering assessment of the prospects for US leadership and democracy.

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Key Discussion Points and Insights

1. Trump’s Tariff Strategy: Contradictory Goals and Global Fallout

• Tariffs as a Cure-All:

  • Dresner likens Trump’s faith in tariffs to a “My Big Fat Greek Wedding” character’s belief that Windex can fix everything ([02:09]):
    • “Trump believes that tariffs can do everything.” — Daniel Dresner [02:17]
  • Trump employs tariffs in three contradictory ways: as coercion, protectionism, and revenue generation ([02:20–03:22]):
    • As a coercive tool to force other nations’ compliance
    • To protect US industries (favorite historical reference: William McKinley)
    • To boost government revenue via import taxes

• Limits, Tactics, and Media Spin:

  • Dresner notes Trump mainly uses tariff threats to appear strong, then accepts token concessions, often claiming political victory regardless of substance ([04:19–04:29]).
    • “He can claim, see, I was willing to throw US economic might around. All these countries caved… an America First foreign policy.” — Daniel Dresner [04:29]

• European Union as a Primary Target:

  • Trump views the EU not as a subordinate (like Canada or Mexico), but as a peer competitor deserving of direct economic confrontation ([05:00–05:33]).
  • Dresner predicts Trump is more likely to actually implement tariffs against the EU, aiming to "take the European Union down a peg.” ([05:33])

• Advice to Europe: Tit-for-Tat or Trinkets

  • Options include counter-tariffs targeted at key US exports (e.g., bourbon from Kentucky), redirecting trade to non-US partners, and offering Trump flashy or symbolic concessions to appease him without substantive change ([06:04–06:38]).
    • “You want to give him trinkets he can then claim as trophies.” — Daniel Dresner [07:14]

2. The Global Order: Erosion of Trust in the US

• Eroded US Credibility:

  • Trump’s unpredictability means allies no longer trust US commitments; they now must hedge against future abrupt reversals ([09:05–09:24]).
    • “All of those allies and partners are going to be looking at the United States now and realizing we can no longer trust you, and we need to prepare and hedge.” — Daniel Dresner [09:16]

• Relative Gains for China and Other Powers:

  • Even with economic troubles, China now appears more stable than the US on the world stage ([09:35–10:02]).
    • “It’s the United States that’s acting crazy. You maybe can’t completely trust us, but we’re not going to try to blow up the system.” — Daniel Dresner [09:57]

• Potential Weakening of the Dollar:

  • While challenging the dollar’s reserve status is difficult, continued unpredictability could push Europe and China to create alternative payments systems ([11:08–12:14]).
  • Historical example: Instex, Europe’s failed Iran workaround, as a “trial run” for non-dollar payment structures ([12:04–12:14]).

• Europe’s Dilemma:

  • EU’s collaboration with the Biden administration on “de-risking” China policy complicates any pivot towards Beijing; Europe is caught between two increasingly unreliable partners ([12:26–13:24]).

3. Stresses on the Transatlantic Alliance and Domestic Institutions

• Death of the Postwar Western Alliance?

  • Dresner suggests the current rupture is deeper than previous cycles of transatlantic tension, rooted in loss of US credibility and the emergence of a true peer rival (China) ([14:09–14:43]).
    • “This is a fundamental rupture that is different from what we have seen in previous go arounds…” — Daniel Dresner [14:20]

• US Systemic Breakdown:

  • Erosion of institutional checks: Congress is largely compliant; federal bureaucracy is being gutted; the Supreme Court demonstrates broad deference to presidential authority ([16:02–16:51]).
    • “[Trump’s] folding of USAID into the State Department...violates the law of Congress. All of these things are illegal, but for them to actually be stopped, you need Congress to...step up.” — Daniel Dresner [15:46]
    • “If Congress is unwilling to step up, the only other arbiter is the Supreme Court...has demonstrated remarkable deference to presidential authority.” — Daniel Dresner [16:39]

• Markets as the Only Constraint:

  • The financial markets may serve as a short-term brake, especially if Trump threatens US debt default ([17:27–18:14]).
  • Trump’s business mentality could lead him to treat national debt like personal bankruptcy, with catastrophic global consequences ([18:36]).

4. Elite Dissent and Prospects for Resistance

• Internal Dissent Unlikely:

  • Burnout rates among senior officials are high, but public opposition is rare due to Trump’s penchant for punishing dissenters ([20:33–21:13]).
    • “Those people don’t survive politically....the question is, do they want to stay within the fold even if they have almost no autonomy, or do they want to be sent out in disgrace?” — Daniel Dresner [21:03–21:13]

• The American People as a Last Check:

  • Poor polling for Trump’s policies and potential upsets in special elections could send warning signals, but real political consequences are tied to the (distant) midterms ([21:35–22:16]).
    • “The fundamental check on Donald Trump’s power...see what happens” in upcoming elections. — Daniel Dresner [21:35–21:41]

• Pessimism about Reversal:

  • Given the pace of executive action, much damage can be done before electoral correction is possible ([22:23–22:26]).
    • “We’re only talking about the damage done after three weeks. Imagine where we will be in January of 2027.” — Daniel Dresner [22:26]

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Notable Quotes & Memorable Moments

• “Trump believes that tariffs can do everything.” — Daniel Dresner [02:17]
• “You want to give him trinkets he can then claim as trophies.” — Daniel Dresner [07:14]
• “The US is no longer a reliable hegemon…what Donald Trump is pursuing is what I call a Humpty Dumpty foreign policy — you’re not going to be able to put it back together again.” — Daniel Dresner [08:17–08:33]
• “Allies and partners are going to be looking at the United States now and realizing we can no longer trust you…and hedge for when you act out.” — Daniel Dresner [09:16]
• “Everything [Trump and Musk] have done so far in the second term is along the lines of ‘move fast and break things’...that works right up until the moment you do something truly catastrophic.” — Daniel Dresner [19:18–19:28]
• “The fundamental check on Donald Trump’s power is going to be...what happens in the special elections...If [Democrats] win one of those three seats, that should be a warning shot across the bow for Republicans.” — Daniel Dresner [21:35–22:05]
• “We’re only talking about the damage done after three weeks. Imagine where we will be in January of 2027.” — Daniel Dresner [22:26]

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Timestamps for Important Segments

• Tariffs as a tool of Trumpism: [01:12]–[03:37]
• Contradictory aims of tariffs: [02:17]–[03:22]
• How Europe might respond: [05:43]–[07:19]
• Structural weakening of US credibility: [08:17]–[09:16]
• China’s strategic gains by default: [09:35]–[10:30]
• Dollar’s reserve status in jeopardy: [11:08]–[12:26]
• Demise of the US/EU alliance: [14:09]–[14:43]
• Checks and balances breakdown: [15:46]–[16:51]
• Markets as a check: [17:27]–[18:14]
• Debt default scenario: [18:36]–[19:37]
• Elite internal resistance and public dissent: [20:33]–[21:13]
• Elections as the last hope: [21:35]–[22:05]
• Level of damage and pessimistic outlook: [22:23]–[22:26]

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Tone and Language

The conversation is analytical, candid, and at times darkly humorous (on trinkets for Trump, bankruptcy analogies). Dresner’s tone is matter-of-fact and at times deeply pessimistic, cautioning that the current trajectory under Trump’s second term presents risks both to US democracy and the international order. Rachman and Dresner punctuate their sobering analysis with sharp but accessible explanations, making complex issues intelligible without jargon.

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For Listeners Who Missed the Episode

• Trump’s trade and domestic policies are uniquely volatile, often at odds with each other, and are straining both foreign alliances and internal US governance.
• Allies are recalibrating how much they can trust American commitments; China stands to benefit from US unpredictability.
• Key elements of the US government and broader liberal order are being rapidly dismantled with minimal resistance from Congress or the courts.
• The only near-term constraints may come from market panic or unforeseen electoral backlash—but both are distant or unreliable bulwarks.
• The episode paints a bleak, high-stakes picture of America’s place in the world in 2025, warning that even short periods of unchecked executive action can have long-lasting, possibly irreversible consequences.

Transcript

[Gideon Rachman]

Hello, and welcome to the Rahman Review. I'm Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week's podcast is about Donald Trump and tariffs and about the Trump administration's whirlwind assault on various bits of the American government, from shutting down the US Aid agency to Elon Musk's seizure of the treasury payment system. My guest is Daniel Dresner, a professor at the Fletcher School at Tufts university in the U.S. he's a specialist on economic statecraft. President Trump's trade wars are taking the world economy in an entirely new direction. So where will it all end?

[Donald Trump]

It's time for our great industries to come back to America, want them back to America. This is the first of many, and you know what I mean by that. We're going to be doing others on other subjects topics. Protecting our steel and aluminum industries is a must, and today I'm simplifying our tariffs and steel and aluminum so that everyone can understand exactly what it means. It's 25%.

[Gideon Rachman]

It's hard to keep pace with all President Trump's tariff announcements. Threats against Canada and Mexico were announced and then paused. Tariffs have been increased on China, and a 25% tax on all imports of steel and aluminum into the US has also been announced, with the promise of more measures to come. All of this has an effect not just on the global economy, but also on America's relationship with its allies, who are learning to expect the unexpected. As you'll hear, one possibility that Dan Dresdner is already considering is that the US Might refuse to make payments on.

[Pierre]

Its debts to foreign creditors.

[Gideon Rachman]

But we started our conversation with the tariffs. What is President Trump trying to achieve?

[Daniel Dresner]

I think the problem is that Donald Trump is trying to do multiple things.

[Daniel Dresner (continued or another expert)]

With them, and those things are contradictory.

[Daniel Dresner]

But first, I would agree with you.

[Daniel Dresner (continued or another expert)]

The line I always use about Trump and tariffs is that Donald Trump thinks.

[Daniel Dresner]

About tariffs the way the father and.

[Daniel Dresner (continued or another expert)]

My big fat Greek wedding thinks about Windex.

[Daniel Dresner]

That character thought Windex could do everything.

[Daniel Dresner (continued or another expert)]

It could cure everything.

[Daniel Dresner]

Trump believes the tariffs can do everything.

[Daniel Dresner (continued or another expert)]

And he's talked about them in three different ways. And the problem is those three different ways are mutually contradictory.

[Daniel Dresner]

First, he talks about tariffs as a tool of coercion. He thinks that because the US Runs trade deficits with so many different countries.

[Daniel Dresner (continued or another expert)]

We'Re getting screwed over in the international system.

[Daniel Dresner]

All we have to do is raise tariffs or threaten to raise tariffs, and.

[Daniel Dresner (continued or another expert)]

We can get countries do what we want.

[Daniel Dresner]

We've seen this play out even in a second term.

[Daniel Dresner (continued or another expert)]

In the first couple of weeks with Colombia and Canada and Mexico.

[Daniel Dresner]

But there are two other things that.

[Daniel Dresner (continued or another expert)]

Donald Trump likes to talk about with tariffs.

[Daniel Dresner]

He believes tariffs are a great tool of economic protectionism. His favorite president is William McKinley.

[Daniel Dresner (continued or another expert)]

He constantly brings up McKinley's tariffs.

[Daniel Dresner]

He thinks that if the United States erects high tariff barriers, it'll promote more.

[Daniel Dresner (continued or another expert)]

Industry in the United States, that more things will be homemade.

[Daniel Dresner]

The third thing that Trump loves about tariffs is that they are taxes. And he talks about all the tax.

[Daniel Dresner (continued or another expert)]

Revenue that can be gained by raising higher tariffs. And it's true, income increased when Trump raised tariffs during his first term.

[Daniel Dresner]

But the problem is you can't do all three of these things. If you believe that tariffs are a tool of coercion, then if the other side gives in, you have to lower the tariffs. And if you lower the tariffs, they.

[Daniel Dresner (continued or another expert)]

Cease to function as a tool of protection or as a tool of raising revenue.

[Pierre]

So with these warring concepts in Trump's mind, do you have any expectation that he'll resolve the contradiction and use them in one way or another?

[Daniel Dresner (continued or another expert)]

No.

[Daniel Dresner]

I don't know if in his own.

[Daniel Dresner (continued or another expert)]

Mind he's got this resolved.

[Daniel Dresner]

It does seem that if the first three weeks of this administration are any guide, he likes the coercion more than he likes the protection or the revenue. And that might be for political reasons, which is that actually imposing tariffs is costly, raises prices. Trump constantly says the foreigners pay for it. Economists will explain ad nauseam that that's.

[Daniel Dresner (continued or another expert)]

Not true, that consumers will pay a higher price.

[Daniel Dresner]

And I think he doesn't want to see consumer prices go up. The advantage of sort of loudly threatening tariffs and then backing down at even.

[Daniel Dresner (continued or another expert)]

The most token concession that's made, which.

[Daniel Dresner]

By the way, is what Mexico and Canada did.

[Daniel Dresner (continued or another expert)]

They didn't offer anything meaningful. They basically just repledged what they pledged back in December.

[Daniel Dresner]

Is that he can claim, see, I was willing to throw US Economic might around. All these countries caved. I once again have accomplished an America first foreign policy. And he has a variety of media outlets that will echo that claim.

[Gideon Rachman]

Do you think we're going to see.

[Pierre]

A similar pattern play out with the eu? Because he's made it very clear that the EU is next in line.

[Gideon Rachman]

And it's not clear to me what.

[Pierre]

The EU can offer. We can't send troops to the border. Fentanyl doesn't appear to come from the European Union.

[Gideon Rachman]

So how does that one play out?

[Daniel Dresner]

I think that one actually plays out.

[Daniel Dresner (continued or another expert)]

With tariffs being implemented, to tell you the truth.

[Daniel Dresner]

I think because in Trump's mind, the European Union is a different category of.

[Daniel Dresner (continued or another expert)]

Actor than Canada or Mexico.

[Daniel Dresner]

With Canada or Mexico, Trump plays the role of bully. He recognizes that the US has significant.

[Daniel Dresner (continued or another expert)]

Asymmetric power over those countries, as well as Colombia.

[Daniel Dresner]

The European Union he views as an economic threat. He has said multiple times that he looks at the European Union as a competitor, equal to some extent to China or Russia, because it's a single economic entity that's not quite the size of.

[Daniel Dresner (continued or another expert)]

The United States, but roughly the size of the United States.

[Daniel Dresner]

So I think he looks to take.

[Daniel Dresner (continued or another expert)]

The European Union down a peg.

[Gideon Rachman]

And if you had to advise the Europeans on how to react, well, firstly.

[Pierre]

How do you think they will react and how do you think they should react?

[Daniel Dresner]

I mean, one way to react, obviously, is to prepare a list of counterterroriffs. What are the things that you can.

[Daniel Dresner (continued or another expert)]

Restrict in terms of U.S. exports that causes U.S. producers some pain?

[Daniel Dresner]

We saw this in the first round when, if you remember, I think there.

[Daniel Dresner (continued or another expert)]

Were tariffs targeted at Mitch McConnell's state of Kentucky. There were high taxes placed on bourbon, because that's where it's manufactured in the United States.

[Daniel Dresner]

So that's one thing. The second thing, if the EU is serious about this, and to some extent they've already done it, is to sign more trade deals with other countries. In other words, to try to redirect trade away from the United States and.

[Daniel Dresner (continued or another expert)]

Towards the MERCOSUR countries or Latin American countries where you sign trade deals, one with Australia.

[Daniel Dresner]

I would actually suggest the EU start.

[Daniel Dresner (continued or another expert)]

Talking to the Trans Pacific Partnership as a way of reaching an accommodation with them. That's the most obvious way to respond.

[Daniel Dresner]

The other way to go is it's what I call the glowing orb solution, which is, can you find a flashy.

[Daniel Dresner (continued or another expert)]

But token concession to give to Trump.

[Daniel Dresner]

That Trump can then parade around to his supporters to say, see, I got.

[Daniel Dresner (continued or another expert)]

The European Union to give in.

[Pierre]

Yeah. Do you think there's a glowing orb somewhere in the cupboard in Brussels? What could that be?

[Daniel Dresner]

I'm trying to think now of things like renaming some building the Donald Trump.

[Daniel Dresner (continued or another expert)]

Memorial Building for Transatlantic Cooperation.

[Daniel Dresner]

I know that sounds absurd.

[Pierre]

Oh, sure. But no, people do think of absurd things. I mean, like, the British are thinking the Royal family are our trump card. You know, give him a meeting with Prince William or stay at the Buckingham.

[Daniel Dresner]

Palace, or think about the Polish, if memory's here, is during his first term.

[Daniel Dresner (continued or another expert)]

They wanted to name a fort Fort Trump.

[Pierre]

Yeah.

[Daniel Dresner]

So that sort of stuff.

[Daniel Dresner (continued or another expert)]

Give him a royal scepter of some kind.

[Daniel Dresner]

What you want to do is give him trinkets.

[Daniel Dresner (continued or another expert)]

They. That he can then claim as trophies.

[Gideon Rachman]

Yeah, and you said we saw how.

[Pierre]

The EU reacted in the first term. So if this is just a story we're familiar with, or do you think that something more fundamental is shifting in the second term in the whole way that America interacts economically with the world?

[Daniel Dresner]

I think there are two stories on this. The first is that Donald Trump has a limited playbook. I mean, he has a couple of.

[Daniel Dresner (continued or another expert)]

Moves that he goes to every time.

[Daniel Dresner]

And so in that sense, this is deja vu. He threatened tariffs during the first term, he's going to do it again in the second term. The difference this time around in the United States is he has far fewer.

[Daniel Dresner (continued or another expert)]

Constraints on his ability to act.

[Daniel Dresner]

So in some cases, the threats might.

[Daniel Dresner (continued or another expert)]

Prove a little more credible.

[Daniel Dresner]

But also, as I said before, I think he wants to find deals. He wants to claim that he's a deal maker. And so if he can negotiate something where he can claim it as a win, he will absolutely do that. The difference this time around is that.

[Daniel Dresner (continued or another expert)]

The world is a little different than it was in 2017.

[Daniel Dresner]

China and Russia are feeling a lot more emboldened.

[Daniel Dresner (continued or another expert)]

The brics, as a grouping, feel a lot more emboldened. The US Is no longer a reliable hegemon. We're shuttering USAID as we're having this conversation.

[Daniel Dresner]

In a lot of ways, what Donald.

[Daniel Dresner (continued or another expert)]

Trump is pursuing is what I call a Humpty Dumpty foreign policy, in that.

[Daniel Dresner]

You'Re not going to be able to put it back together again.

[Pierre]

Why not? I mean, you know, let's say the Democrats come back in four years time. Can't they just say, okay, we're going to properly fund usaid, we're going to put those programs back in place?

[Daniel Dresner]

Sure. And for the rest of the world, this will sound like deja vu, because.

[Daniel Dresner (continued or another expert)]

This is what Joe Biden promised when.

[Daniel Dresner]

He was elected in 2020, saying, America is back. The problem is they're also keenly aware that maybe in 2032, J.D. vance gets elected or Tom Cotton or someone else. So the fact is, you can no longer count on the US Ability to.

[Daniel Dresner (continued or another expert)]

Credibly commit to anything anymore in world politics. And that's essentially the fundamental problem.

[Daniel Dresner]

The US Has a dense network of.

[Daniel Dresner (continued or another expert)]

Alliances and partners, and all of those allies and partners are going to be.

[Daniel Dresner]

Looking at the United States now and realizing we can no longer trust you, and we need to prepare and hedge.

[Daniel Dresner (continued or another expert)]

For when you act out.

[Pierre]

So does all of this play to the advantage of China?

[Daniel Dresner]

Yes, it absolutely does. China's been going through it over the last Five years. It's not like China's necessarily had a great couple of years.

[Daniel Dresner (continued or another expert)]

Their economy is slowing.

[Daniel Dresner]

They throttled Covid, but at an appalling cost.

[Daniel Dresner (continued or another expert)]

Their economy is slowing down.

[Daniel Dresner]

But, you know, in international relations, it's.

[Daniel Dresner (continued or another expert)]

Always a relative game.

[Daniel Dresner]

And so China is now going to be able to go to the rest of the world and say, look, we're.

[Daniel Dresner (continued or another expert)]

Not the ones trying to break the international system now.

[Daniel Dresner]

We want to have more trade, we.

[Daniel Dresner (continued or another expert)]

Want to have more investment.

[Daniel Dresner]

It's the United States that's acting crazy. You maybe can't completely trust us, but.

[Daniel Dresner (continued or another expert)]

We'Re not going to try to blow up the system.

[Gideon Rachman]

Pierre, how does that turn into a Chinese strategy?

[Pierre]

Is it just a waiting game, basically watching America do their work for them?

[Daniel Dresner]

Yeah. The fundamental rule of international politics is that if you see your rival punching itself in the face repeatedly, why join in?

[Daniel Dresner (continued or another expert)]

Just let them exhaust themselves.

[Daniel Dresner]

So if I was China and I was dealing with this, the way you do it is by saying, look, we're open for business.

[Daniel Dresner (continued or another expert)]

You want to sign trade deals with us, you want to sign partnerships with.

[Daniel Dresner]

Us, we are happy to do that. And you engage in a light touch because, again, what you're trying to do is set yourself up as the counterpoint, as the doppelganger to an increasingly bellicose and apparently territorial expansionist United States.

[Pierre]

Yeah.

[Gideon Rachman]

And one of the things that Trump.

[Pierre]

Does seem keenly aware of, other than tariffs, is he said that losing the dollar's reserve status would be the equivalent of losing a war.

[Gideon Rachman]

And one of the things we did.

[Pierre]

See China and Russia attempting to do over recent years was at least experiment with trying to get the BRICs or get other organizations to stop using the dollar quite as much as they're doing the things that are happening right now. How does that affect that question?

[Daniel Dresner]

It's possible, but this is where Trump is not wrong in that the US.

[Daniel Dresner (continued or another expert)]

Has overwhelming strengths and the weight of history in terms of having the dollar be the reserve currency. The United States continues to have the.

[Daniel Dresner]

Deepest, largest capital markets in the world. Because the US Issues so much debt. We have a lot of securities that.

[Daniel Dresner (continued or another expert)]

Are also denominated in dollars.

[Daniel Dresner]

For anyone to try to challenge the.

[Daniel Dresner (continued or another expert)]

Dollar standing as a reserve currency, you.

[Daniel Dresner]

Would need to be able to provide all of these things. And this is where I do think that's a step too far. Even now for China, they're not prepared yet to do that. What would be interesting is if the United States continues to act in a truly capricious manner, will you start seeing.

[Daniel Dresner (continued or another expert)]

Let'S Say the European Union and China.

[Daniel Dresner]

Trying to fashion some sort of common response. You saw this briefly, if you remember.

[Daniel Dresner (continued or another expert)]

When the US withdrew from jcpoa, that's.

[Pierre]

The Iran nuclear deal.

[Daniel Dresner]

Right. And reimposed sanctions on Iran. Europe tried to create this thing called.

[Daniel Dresner (continued or another expert)]

Instex, which was an alternative payments mechanism.

[Daniel Dresner]

To get something to Iran that wound.

[Daniel Dresner (continued or another expert)]

Up crashing and burning. It didn't really work very well, in no small part because the Iranians.

[Daniel Dresner]

But you can argue it's a trial.

[Daniel Dresner (continued or another expert)]

Run for potentially Europe or other countries trying to create alternative payments mechanisms that no longer rely on the dollar and no longer rely on correspondent banking accounts in the United States.

[Pierre]

Interesting.

[Gideon Rachman]

But of course, Europe has its own.

[Pierre]

Dilemma vis a vis China, because, I mean, I think one of the really striking things over the last four years for me was where the Biden administration and the European Commission really work much more closely together on what they call de risking Western economic strategy with China.

[Gideon Rachman]

And the Europeans did that partly because.

[Pierre]

The Americans persuaded them to, but partly because they also began to fear China's intentions and began to fear China's impact on the European economy and China's backing for Russia. So, I mean, if the Europeans move closer to China, aren't they kind of cutting off their nose to spite their face, making another tactical blunder?

[Daniel Dresner]

That's certainly possible. But then the question becomes, if you're European, who is the more capricious partner going forward? Is it a United States under Donald Trump or is it a China under Xi Jinping? And that's a legitimate question. There's not an obvious answer. But the very fact that you can say it's not an obvious answer is kind of an appalling statement to make.

[Daniel Dresner (continued or another expert)]

From a transatlantic perspective. Did I talk too much? Can't I just let it go?

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[Gideon Rachman]

So do you think we're really possibly.

[Pierre]

Witnessing the death of the transatlantic partnership that really underpinned international relations since the end of the Second World War?

[Daniel Dresner]

I do. Unfortunately, you know, it is possible that.

[Daniel Dresner (continued or another expert)]

It can be revived.

[Daniel Dresner]

And as anyone who has spent some years on this planet, I've seen the.

[Daniel Dresner (continued or another expert)]

Transatlantic relationship wax and wane over the years.

[Daniel Dresner]

But this is a fundamental rupture that.

[Daniel Dresner (continued or another expert)]

Is different from what we have seen in previous go arounds and the rupture.

[Pierre]

Being based on what? The tariff threats, the attitudes to NATO and the attitudes to international law.

[Daniel Dresner]

It's the whole McGillish. It's the fact that, again, US credible.

[Daniel Dresner (continued or another expert)]

Commitments no longer apply.

[Daniel Dresner]

And also US credible commitments no longer.

[Daniel Dresner (continued or another expert)]

Apply in a world in which there is a peer competitor, the United States, and that being China.

[Gideon Rachman]

So when we say they're dying, I.

[Pierre]

Mean, are we still in a state of flux?

[Daniel Dresner]

Yes, very much so. We're only a couple of weeks into.

[Daniel Dresner (continued or another expert)]

The second Trump administration.

[Daniel Dresner]

You know, I'm old enough to remember when George W. Bush was elected president. His first term was viewed as wildly.

[Daniel Dresner (continued or another expert)]

Revisionist in terms of what he was.

[Daniel Dresner]

Doing to the international order. People forget that his second term was essentially walking back a lot of what.

[Daniel Dresner (continued or another expert)]

He did during his first term.

[Daniel Dresner]

In theory, that could happen this time around.

[Daniel Dresner (continued or another expert)]

I'm extremely pessimistic. That'll actually be the case, though.

[Pierre]

Yeah.

[Gideon Rachman]

But just give me a sense then.

[Pierre]

Of the pessimism and the mood in the United States. I mean, you come from one of the big east coast universities, the kinds of places that Trump and Trump MAGA world are deeply suspicious of.

[Daniel Dresner]

Yes, I'm a coastal elite.

[Pierre]

And as a coastal elite, do you feel we talked about the international system, but that the US System is unraveling?

[Daniel Dresner (continued or another expert)]

It's definitely unraveling.

[Daniel Dresner]

The problem is a lot of what.

[Daniel Dresner (continued or another expert)]

You'Re seeing this administration do, both in.

[Daniel Dresner]

Terms of Elon Musk rooting around in.

[Daniel Dresner (continued or another expert)]

Federal payment systems and the General Services Administration and the Office of Personnel Management.

[Daniel Dresner]

It's not clear that this is in any way legal. The folding of USAID into the State Department, that violates the law of Congress. All of these things are illegal, but for them to actually be stopped, you need Congress to actually say, hey, you're.

[Daniel Dresner (continued or another expert)]

Stepping on our institutional prerogatives in a lot of instances.

[Daniel Dresner]

And the Republicans control Congress, and they have indicated little discontent with what Trump is doing. And so you can violate the law.

[Daniel Dresner (continued or another expert)]

If no one has any interest in prosecuting you for it. And that's essentially what Trump is doing at this point.

[Pierre]

What is the prospect of any accountability? I mean, as you say, Musk appears to be violating the law. Right.

[Daniel Dresner]

There are courts, and you've seen the.

[Daniel Dresner (continued or another expert)]

Federal courts intervene to execute stays of government action.

[Daniel Dresner]

So it's not like Trump is going.

[Daniel Dresner (continued or another expert)]

To succeed at everything.

[Daniel Dresner]

But bear in mind that in the end, if Congress is unwilling to step up, the only other arbiter is the Supreme Court. And this is a Supreme Court that.

[Daniel Dresner (continued or another expert)]

Has demonstrated remarkable deference to presidential authority. In recent years.

[Daniel Dresner]

So I am not terribly optimistic about.

[Daniel Dresner (continued or another expert)]

Their check on executive branch overreach.

[Daniel Dresner]

It's worth remembering that even during the first term, when Trump implemented the Muslim.

[Daniel Dresner (continued or another expert)]

Ban, within a week of coming in.

[Daniel Dresner]

The Supreme Court stated, but really their rulings indicated, you wrote this horribly.

[Daniel Dresner (continued or another expert)]

Write it better so we can approve it.

[Daniel Dresner]

And that's in some ways what I.

[Daniel Dresner (continued or another expert)]

Expect the second term will be like.

[Daniel Dresner]

Where a court that is even more.

[Daniel Dresner (continued or another expert)]

Conservative than it was in 2017, basically enabling the Trump administration to do legally what it wants to do anyway.

[Pierre]

Okay, so the Supreme Court's not gonna stop him. Congress isn't gonna stop him.

[Daniel Dresner (continued or another expert)]

The bureaucracy is definitely not gonna stop him.

[Pierre]

No, because bureaucracy's been gutted right now. What about the markets?

[Daniel Dresner (continued or another expert)]

The markets remain the only short term check on Donald Trump.

[Daniel Dresner]

But think about what happened a week.

[Daniel Dresner (continued or another expert)]

Ago when Trump was threatening to impose tariffs on Mexico and Canada, which is.

[Daniel Dresner]

The markets did react badly to that right up until the moment where there was a 30 day stay and then the markets actually celebrated and went up. There are a few things that the.

[Daniel Dresner (continued or another expert)]

Markets will actually punish Donald Trump on. If there is a risk of defaulting on the debt, for example, or if.

[Daniel Dresner]

Trump says, we're only going to pay.

[Daniel Dresner (continued or another expert)]

Domestic creditors on the debt, we're not.

[Daniel Dresner]

Going to pay foreign creditors, anything that mucks around.

[Pierre]

Possible.

[Gideon Rachman]

Do you think he might do that?

[Daniel Dresner]

I think that getting access to Treasuries.

[Daniel Dresner (continued or another expert)]

Payment system is in fact a step towards doing that.

[Daniel Dresner]

I'm not necessarily sure they're going to, but that would certainly enable them to.

[Daniel Dresner (continued or another expert)]

Actually implement a program where they only pay domestic creditors.

[Gideon Rachman]

Or have you had that as an.

[Pierre]

Idea that's floating around?

[Daniel Dresner]

Yes, I have, but it's been floated around by critics.

[Daniel Dresner (continued or another expert)]

I'm not saying that they're absolutely going.

[Daniel Dresner]

To do that, but it's now theoretically.

[Daniel Dresner (continued or another expert)]

Possible in a way that I don't think anyone had previously considered.

[Pierre]

Because they have access to the computer.

[Daniel Dresner (continued or another expert)]

Exactly.

[Gideon Rachman]

And I suppose Trump, with his real.

[Pierre]

Estate developer hat on would think, well, I defaulted on debts all the time, it's just part of a renegotiation.

[Daniel Dresner]

Exactly. How many times has Donald Trump declared bankruptcy? Four or five? I think I've lost track. I think for him, the idea of the US declaring bankruptcy and then saying, well, we're just going to reorder our debts, he sees no difference in terms of that. Obviously everyone else would and there would be massive ramifications. But I can't rule out entirely the possibility that Trump views this as a threat to sort of, I don't know.

[Daniel Dresner (continued or another expert)]

Lower interest rates or reschedule debt payments or what have you.

[Gideon Rachman]

But if he were to do that.

[Pierre]

The foreign buyers of American debt would run for the doors.

[Daniel Dresner (continued or another expert)]

That's correct.

[Pierre]

You would have a massive crisis.

[Daniel Dresner (continued or another expert)]

Yes, you would have a massive crisis.

[Pierre]

And then you really would have the dollar's reserve currency status in question on board.

[Daniel Dresner]

But here's the thing about Donald Trump and Elon Musk. Everything they've done so far in the.

[Daniel Dresner (continued or another expert)]

Second term is along the lines of.

[Daniel Dresner]

We need to move fast and break things and it's better to take action.

[Daniel Dresner (continued or another expert)]

And then apologize rather than ask for permission. That works right up until the moment that you do something that is truly and utterly catastrophic.

[Daniel Dresner]

And so my concern going forward is that they will try to do something.

[Daniel Dresner (continued or another expert)]

Like this, not realizing the catastrophe they are inviting.

[Gideon Rachman]

Right, that's almost a good point to end. But I do have a couple of questions there because there are a few.

[Pierre]

Remaining, what they call grownups around Scott Bezant, you know, a hedge fund manager, treasury secretary.

[Gideon Rachman]

And one of the questions that I.

[Pierre]

Keep asking myself watching all of this is at what point did these ganglies say, yeah, I can't really go along with this?

[Gideon Rachman]

I mean, in terms of foreign policy.

[Pierre]

I can't believe that anybody around Trump, Rubio or Waltz thinks that turning Gaza into part of the United States is a good idea or possible even. I mean, we're in the realms of psychology here, but also of politics. Do you think you might get people internally dropping away or even trying to put a halt to the list?

[Daniel Dresner]

It's always worth remembering that the burn.

[Daniel Dresner (continued or another expert)]

Rate on working for Donald Trump is incredibly high. We saw that in the first term. There was a tremendous amount of churn.

[Daniel Dresner]

So it's possible that folks will leave. What I don't think you're going to see all that much, however, is those.

[Daniel Dresner (continued or another expert)]

People publicly voicing opposition.

[Daniel Dresner]

Because if there's one thing that Donald.

[Daniel Dresner (continued or another expert)]

Trump has demonstrated over and over and.

[Daniel Dresner]

Over again, it is that he is really good at pointing his ire at.

[Daniel Dresner (continued or another expert)]

Anyone within the Republican Party who opposes them. And those people don't survive politically.

[Daniel Dresner]

And so to the Marco Rubio's or Scott Bessense of the world, the question is, do they want to stay within.

[Daniel Dresner (continued or another expert)]

The fold even if they have almost no autonomy, or do they want to.

[Daniel Dresner]

Be sent out in disgrace?

[Daniel Dresner (continued or another expert)]

And I think for most of them, they've made their choice. They've already agreed to serve in this administration.

[Daniel Dresner]

They knew what this was going to be like.

[Pierre]

Really?

[Daniel Dresner]

Yeah.

[Pierre]

Okay, so last constraint, a final straw to clutch at the American people.

[Gideon Rachman]

Because if you look at how a.

[Pierre]

Lot of these ideas poll, they're not very popular.

[Daniel Dresner]

No, no, they're not.

[Daniel Dresner (continued or another expert)]

The fundamental check on Donald Trump's power.

[Daniel Dresner]

Is going to be take a look.

[Daniel Dresner (continued or another expert)]

And see what happens.

[Daniel Dresner]

There are special elections that are gonna.

[Daniel Dresner (continued or another expert)]

Be held to replace the members of the House that have accepted jobs in the administration. There's Elise Stefanik in New York and Michael Waltz in Florida. Also, they have to replace Matt Gaetz's seat as well.

[Daniel Dresner]

These are all incredibly GOP leaning districts. If it turns out that Democrats win.

[Daniel Dresner (continued or another expert)]

One of those three seats, that should be a warning shot across the bow for Republicans in the Trump administration.

[Daniel Dresner]

And then there's obviously the midterms. And you know, it's worth remembering public opinion is thermostatic. If there is any sort of economic.

[Daniel Dresner (continued or another expert)]

Turmoil that happens in the next two.

[Daniel Dresner]

Years, you would expect Democrats to do well. And they've always done well in off.

[Daniel Dresner (continued or another expert)]

Year elections in the age of Donald Trump. But that's a long ways away.

[Pierre]

Two years, they can do a lot of damage.

[Daniel Dresner (continued or another expert)]

Yes.

[Daniel Dresner]

We're only talking about the damage done after three weeks.

[Daniel Dresner (continued or another expert)]

Imagine where we will be in January of 2027.

[Gideon Rachman]

That was Professor Dan Dresner of the Fletcher School of Law and Diplomacy ending this edition of the Rachman Review. Thanks for listening and please join me again next week.

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