← The World with Richard Engel and Yalda Hakim
The World with Richard Engel and Yalda Hakim
A conversation with historian Sir Niall Ferguson on Trump, tariffs and China
00:50:14
Richard and Yalda are joined by one of the world's most eminent historians and political commentators to discuss culture wars, trade wars and the possibility of World War Three over Taiwan. Sir Niall says the US may be in the stage of "buyer's...
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- [00:08]
Richard Engel
Hello and welcome to the World with me, Richard Engel. I'm just outside of Lisbon at the moment and this week we have a slightly different episode. Yalda is taking some time off with her family, but before she went away, we recorded an amazing episode with the British American historian Sir Neil Ferguson, who is one of the most astute commentators on international politics on the planet. In it's a wide ranging discussion that touches on the impact of President Trump's tariffs. We recorded it the day he released the tariffs, his relationship with Elon Musk, who Ferguson describes as a modern day Napoleon, and the likelihood of a war between the US And China over Taiwan, which is something we focused a lot on this podcast before. But before we get going, a reminder to follow us wherever you get your podcasts. Leave us a review, tell us what you think, and write to us directly@theworldky.uk we love getting your messages. And with that, here is our conversation with Sir Neil Ferguson. I hope you enjoy it.
- [01:17]
Yalda Hakim
Hello, you're listening to the World. I'm Yalda and I'm currently in London.
- [01:22]
Richard Engel
And I'm Richard Engel and I'm back in Lisbon. And today we have a guest, Yalda, someone we've been talking about having on this podcast since we launched this podcast. Actually, I think even before we launched this podcast, we had the idea that one day, hopefully one day soon, we would have our friend, historian, writer, author, Neil Ferguson on. And he's joining us right now.
- [01:46]
Yalda Hakim
Yeah, absolutely, Richard, as you say, I mean, Neil's been top of our list as someone we wanted to get on, help our audiences understand the world better. And it's such an honor to have you with us, Neil, as Richard was saying there, you're a prominent historian, you're a public intellectual, you're a prolific writer, you've written 15 books, you're known for being an economic historian. And of course, one of the biographies you're most well known for is the one that you wrote about Henry Kissinger, who of course was also one of your good friends. So we're really excited about getting stuck into the state of play at the moment. Richard, I don't know if you want to go first. I mean, I have so many questions.
- [02:31]
Richard Engel
Well, I wanted to start out because you're not just all of those things we just described and. Hello, you can speak. Neil, say hello to everyone.
- [02:39]
Neil Ferguson
I'm just listening, I'm laughing.
- [02:42]
Richard Engel
We're just buttering you up for the setup, but you're actually watching us right now, so it's a little awkward. So it's good to be with you.
- [02:47]
Neil Ferguson
Yeah, it's great to be here. I'm sure this is all leading up to some really nasty question, with all.
- [02:53]
Richard Engel
Due respect, but no, just a little bit more set up, because we have the advantage of knowing you, knowing your work, knowing you personally. And what I wanted to also remind our viewers of is you're also, at times, you could be polemical, you could be controversial, and you are generally associated with, I think you could say the conservative movement or an anti woke movement. And I wanted to get your sense desperately on how you see things going in the United States. Right now. You're currently in Texas, you're founding a new university, which is a huge thing. And I want to get into that. Because you felt the education system had gone so far, sort of had lost its path so badly that you wanted to start at a new place. So I wanted to get your thoughts. As someone who's coming from this world and who at times has supported President Trump's mission, not saying his actions, but you supported him in principle, how do you feel about the way things are going in the US Right now?
- [04:05]
Neil Ferguson
Well, there's an old song that I often think of these days that dates back to the 1970s from my native Scotland by a band called Steelers Wheel. And the song was Stuck in the middle with you. And there's a great line, clowns to the left of me, jokers to the right. Here I am stuck in the middle with you and I'm just a classical liberal raised in the spirit and ideas of the Scottish Enlightenment, trying to work out how the world really works. You called me controversial. What's the opposite of controversial? Boring. So there's no point, it seems to me, writing history and trying to connect the past to the present if what you say is just bromides. My whole raison d'etre is to force people to rethink their assumptions. So I don't regard controversial as derogatory, though it's usually used that way. When people say no stranger to controversy, they mean, oh, here comes trouble. Conservative. You know, I've always been called a conservative by people on the left. That started in England long ago when the Guardian newspaper would always refer to me as conservative historian. They never called Simon Sharma liberal historian, he was just historian. And I noticed that double standard early on, I think, relative to the academic left. I guess I am a conservative because most of what has been happening in universities, especially in the last 10 years, has been deeply repellent to me. The erosion of academic freedom the introduction of a kind of culture of censorship and self censorship, and the ultimate replacement of excellence in the pursuit of truth with bogus notions like diversity, equity and inclusion. All of these things are bad, have been very bad for the universities. And now everybody can see that, because Columbia is a madhouse, Harvard's a lunatic asylum. And that means if creating a new university based on the principles of the pursuit of truth and academic freedom is conservative, then fine, you can call me that. But I don't think it's actually a conservative position. I think liberals, if they're serious about liberalism, if they've ever even heard of John Stuart Mill, should be on my side. You ask me, what is the state of the nation? That is a difficult question to answer, because the United States is never in equilibrium. Each day it is tilting one way or another between two increasingly incompatible positions. The blue philosophy of the Democratic Party, the red philosophy of what we still call the Republican Party, but what it has in fact become, the Trump Party. And so on any given day, it's hard to say, is the nation on board with Donald Trump the way it was in the wake of the election? Less so. Quite a bit less so because the euphoria, the vibe shift, as it was called, of November 5th has faded, as was bound to happen. This is America. You're full of enthusiasm for the new president, but within 100 days, you're like, actually, this isn't so great. And a lot of the things that Trump has done since his inauguration have been at odds with popular expectations as well as elite expectations. Let me try and simplify this, Richard, and interrupt me if I'm being controversial or conservative or just boring. The Americas voted for Donald Trump for two reasons, only two. You can explain the election very simply. They were annoyed about the inflation that the Biden administration was clearly responsible for that peaked out at 9% consumer price inflation in August of 2022. And they were annoyed about large scale illegal immigration, which let around 8 million people into the country in the space of four years. Kind of amazing number. And so that's why Trump won. There really didn't need to be any other issues. Of course, there were lots of other issues that Trump campaigned on, but those issues were largely ignored, partly because the Harris campaign didn't engage with any of Trump's policy proposals. They just said he was a bad person, which didn't work. Now we are, as we have this conversation, on April 2nd, Liberation Day, Donald Trump is about to impose the biggest increase in tariffs that we have seen since the 1930s. That could conceivably take the average US tariff rate back to where it was in 1937. You do not have to be very well versed in economic history to know that that has its economic risks. It will almost certainly raise prices. That's a guaranteed outcome. And it will very likely lower the growth rate down towards about 1%. There's a roughly 25, maybe 50% chance of a recession that's not going to be popular. Higher prices plus higher unemployment, which seem likely consequences of what Trump is doing, will make him less popular. His popularity has already declined. So has that of Elon Musk, who has become a kind of partner to the president since last year's election campaign. So if you ask me what is the state of the nation, I would say we're in the buyer's remorse phase of this presidency. There's a phrase that I remember from my boyhood growing up in Britain ever been had, which was what people used to say when they played a practical joke on somebody. Have you been fooled? I think a lot of people are waking up in the morning and wondering if they've been had.
- [10:00]
Yalda Hakim
Neil, on top of everything else that Richard said in terms of how we've described you, I would also say you're a contrarian. And just referencing what you said earlier, you help people understand or think about things in a different sort of way or things that they may not be thinking about. But if we look at the last eight weeks, then would you say Americans voted for Donald Trump thinking that he would deal with inflation and grocery prices and the economy, not whether Americans troops are going to be in Gaza or they're going to take over Greenland or, you know, whether the war in Ukraine is going to be resolved. He's focused on all of these things that frankly, the average American voter is thinking. This has got nothing to do with what I want resolved right now.
- [10:45]
Neil Ferguson
Well, this podcast is called the World. Americans don't tend to vote on foreign policy issues. They come well down the ranking. And in that sense, issues like the ones that you've mentioned were not a big part of last year's election campaign. You could argue that one thing that really made sure that Trump won didn't just sneak home like he did in 2016, but one handedly was the culture war issues. The Trump campaign went after that. And in Kamala Harris, they had a good target. The most successful little bit of Trump propaganda in the campaign was she meaning Kamala Harris is for they them, I'm for you or words to that effect. Those culture war issues which had emanated from the universities. The notion that you should introduce your personal pronouns. Hello, I'm Neil, and my preferred pronouns are he, him. Most Americans think that that stuff is just insane. They also think that it's quite insane for people who claim that they are women but were in fact born male to be competing against biological women in sports. All of the stuff that the left embraced in the academy, which then spread out into the media, into the tech companies. Ordinary Americans were never remotely down with wokeism, which will just. We'll use that term as a shorthand, but critical. Race theory, not a popular thing. Explicit discrimination in favor of minorities, not very popular. Affirmative action, not very popular. And the Trump campaign hit that quite hard. So those issues mattered. The status of Greenland. I honestly don't think there's a single voter in the United States who had that on his or her or their mind on the day of the election. Canada. Americans don't really think that much about Canada. I'm always struck by the fact that when I'm in the United States, until recently, you wouldn't know Canada existed except on the Rare occasions when U.S. ice hockey teams play Canadian ice hockey team. Most of the time, Canada's never discuss. But Trump has turned Greenland into an issue. He's turned Canada into into an issue. He's taken a whole range of foreign policy issues and stoked the fire. You mentioned Gaza. Trump came up with a wild idea that Gaza was essentially going to be depopulated and turned into some kind of holiday resort, a Riviera. Those ideas were not in the election discussion at all. And since his inauguration, indeed, even before it, Trump has thrown out a whole series of ideas in foreign policy that you couldn't tell whether they were just trolling or for real. But they're certainly not why he won the election. And if you asked me, do they make him more or less popular? I think taken together, the polling already shows this. On most of these issues, his position is not a popular issue. It's not a popular position.
- [13:57]
Richard Engel
So you mentioned a couple of things I just want to jump in on. You mentioned wokeism, and I know that's an issue that's near and dear to your heart. It has been a bee in your bonnet for many years. You were railing against Wokism and DEI on university campuses for a decade now. Yeah, I've been listening to you talk about it and saying that it was a problem for academic freedom, that professors weren't comfortable teaching the classics. They weren't comfortable teaching anything because unless it was written this week, it's going to contain language and stereotypes that people found objectionable to and therefore you ended up tying yourself in knots. Right. We've had this discussion. You were sort of one of the OGs of this, of, of this, of, of this movie.
- [14:42]
Neil Ferguson
I don't know what OG stands for.
- [14:43]
Richard Engel
Original Gangster.
- [14:44]
Yalda Hakim
Original Ghost.
- [14:45]
Neil Ferguson
Founder.
- [14:46]
Richard Engel
It means founder. So the question, the question I, I had is do you think you have been had because you were on board with this idea that this, this trend in America, this, this is anti intellectual, it's anti freedom, it's anti sort of egalitarian. I understand that the approach you took toward the issue, but do you think that this cause wokeism has been now weaponized for an executive takeover, a Trump takeover of the United States using this annoying issue that you railed against and using that as an excuse to take over the government, dismantle the government, crack down on universities, put them under executive control.
- [15:37]
Neil Ferguson
I told a lot of people last year and the year before that Trump was going to get reelected. Did that mean. I thought it was a wholly good thing. If you actually read what I wrote, I kept pointing out that if you re elect Donald Trump, you are reelecting somebody whose conduct in the wake of the 2020 election was, to say the very least, open to question. At the beginning of last year, I said, I wrote this, this election could be understood as a choice between Empire or Republic. Donald Trump is the first president, I think, in the history of the United States generally only to aspire to imperial power, both internationally and domestically. So when I told people Donald Trump is going to win and it doesn't matter whether you run Biden or Harris, I wasn't saying let's all party. My point was this is where you have led us. I thought the Biden Harris administration was pretty disastrous. It was disastrous economically in the sense that they made an absolutely avoidable blunder with fiscal policy in 2021 which led to the inflation spike, the illegal immigration strategy, I said in 2021 would be their undoing. Opening the southern border was an indefensible thing. The Democrats have played fast and loose with the rights of citizens in a way that I thought was self destructive for the party. I would not have wanted to see that regime continue for another four years, especially not with somebody as ill qualified to be president as Kamala Harris. So I think the American voters made the only decision that they could make, which was to re elect Trump. But re electing Trump was a vote for Empire, even if people didn't recognize it. And Trump made that immediately clear people had wrongly been categorizing him as an isolationist. I've always thought that was really quite stupid and suggested that nobody had paid any attention to what Trump said. Trump made it clear in the election campaign that his role model was William McKinley, president from the 1890s. And McKinley was not only tariff man, he was a big proponent of protectionist tariffs, but he was also imperial man. He had added to the United States significant territories after the Spanish American War, including Guam, basically got an option on Cuba and the Philippines, Puerto Rico, still in effect an American colony. So for Trump to say McKinley was the role model was a big clue as to where he was going. In addition to which, it's always been obvious that Trump's relationship to the US Constitution is at best a tenuous one. It's not clear that Donald Trump has ever read that document. It's not clear that he has any deep respect for it. So the vote for Trump, which I think the Democrats brought upon themselves, was a vote for empire. And that, of course, poses a threat to the Republic. I think we don't know one kind of entirely foresee history, whether or not the Constitution is strong enough to withstand a would be emperor in the White House. I think it is probably because it was designed with that in mind. The Founding Fathers understood an important lesson of history that goes back many thousands of years, namely that republics are quite fragile and can easily descend into tyranny. So I think my base case is that the separation of power still works. That Trump's ambitions, for example, to have a third term which is against the Constitution, will be thwarted. That over time, as the economy goes wrong, the forces of resistance within the Congress will become more powerful as well as in the courts, and that ultimately this imperial vision will fail. I think that's my base case. Is there some scenario in which the economics goes better than I expect? I suppose it's conceivable. Is there a scenario in which the separation of powers sort of fails and the Supreme Court and Congress go along with an undermining of the Constitution? I suppose it's possible, but it just doesn't seem that likely to me. So this is where we are. It was always bound to be a somewhat Faustian pact between the electorate and Trump, and we'll see just how it plays out. But my bet is that the unintended consequences of Trump's protectionism, the adverse economic consequences of protectionism, and the adverse economic consequences of tearing up what we used to call the liberal international order, trashing the transatlantic alliance, taking whatever steps he takes in the Middle east and crucially risking a showdown with China. The unintended consequences of both the economic policy and the foreign policy will mean that by this time next year he will be underwater, deeply underwater in the polls. The Republicans will be heading for disaster in the midterms, and the conversation will turn to who's next.
- [21:19]
James Matthews
Donald Trump is heading back to the White House.
- [21:22]
Richard Engel
Together, we can truly make America great again.
- [21:26]
Neil Ferguson
We are in for an unpredictable but fascinating four years.
- [21:29]
James Matthews
And we're going to be following every twist and turn for the first 100 days. We'll be bringing you the latest updates and analysis first thing every morning. So join me, James Matthews, me, Martha.
- [21:41]
Richard Engel
Calnick, and me, Mark Stone for Trump.
- [21:44]
James Matthews
100 every weekday at 6:00am, wherever you get your podcast.
- [21:59]
Yalda Hakim
Yeah, Neil, I mean, you said so many interesting things there. I just want to pick up on. Earlier, you said that the American people were at the buyer's remorse stage of this. The polls have started to speak to some and the polls have started to speak to this, but there certainly doesn't appear like they're rallying around the Democratic Party at the moment. They seem to be still licking their wounds. And we've been speaking a lot about revolutions protests on this podcast in Serbia, Turkey, Tel Aviv, people are taking to the streets. We're not necessarily seeing that in the United States at this stage. So I wanted you to speak to that. And then the other point that you've just made about the rules based order as we know it, this talk that you know, perhaps that has not just it's not just in crisis, but it is basically being destroyed by those who have built it. And the split that we're seeing in the transatlantic relations now is a very real thing. And you've sort of started to allude to the idea of empire, spheres of influence. If you can just talk to both.
- [23:02]
Neil Ferguson
Of those points, by and large, Americans don't need to take to the streets because it's a democracy and you get to vote quite a lot in this country. Just to explain, I'm a US citizen, have been since 2018. And by comparison with almost everywhere in the world, this is a very democratic country where you get a lot of opportunities to voice your dissatisfaction with the people in elected office. So it's quite rare for there to be large scale protests. And when they happen, for example, in 2020, in the wake of the killing of George Floyd, it's almost helpful to Republicans because most Americans actually don't want to see large mobs rampaging through their cities, especially when they create violence in the process. So I think what we should watch for here is just the familiar pattern where a newly elected president's approval decays and decays rapidly in the case of an economic slowdown or recession. And then the Democratic Party, slowly but surely, A, learns the lessons of defeat and B, sees the opportunity of a comeback. Is it happening fast? No. It's actually striking how much trouble they're having confronting what they got wrong. And it's clear that it will take a while for the Democrats to get their house in order, but they've got time. Second point, I think the imperial bravado that characterizes Trump and Vice President Vance's style. We're going to go to Greenland. We're just going to take it. The Panama Canal, we would like it back. We're going to rename the Gulf of Mexico, and Canada going to be the 51st state. This is the trolling empire. Behind that facade of bravado is an acute sense of American weakness. And what they really think goes something like this. We are in a weak position. We have commitments all over the world that we can't possibly afford, given the fact that we're now spending more on interest payments on the federal debt than on defense. And that's only going to get worse because we've inherited this chronic fiscal imbalance. So we can't fight wars in Ukraine and the Middle east and potentially the Far east all at once. We need to do some consolidation. So one line of argument says, let's liquidate this commitment in Ukraine. It's not really a vital national interest. Let's try and get out of the Middle east if we can. Let's get whatever is left of US Troops out of Syria and Iraq. And if we have one focus, it should be China. I think that's a fairly widely held view. And this is the Nixonian part of Trump that people miss, but I think is key. Whatever he says about McKinley. The real inspiration is Richard Nixon, who in 1969 had a similar sense of American overstretch. We had this war in Vietnam, which was, of course, a much bigger commitment. Ukraine. First order of business for the Nixon administration was trying to wind that up. Middle east was a headache. What could they do? Could they somehow avoid a major clash between Israel and the Arabs? That was the big question. And then you had Russia or the Soviet Union, as it was then called. And what Nixon and Henry Kissinger did was quite brilliant. They exploited the split between the Soviets and the Chinese. Kissinger secretly went to Beijing in 1971 and Nixon went the following year, and this was a huge shock to everybody in Asia that Richard Nixon, the Cold Warrior, would go to Beijing and meet with Mao Zedong. It was a decisive moment in the Cold War. It really changed the geopolitics. Well, the notion that some people in Trump world have is that there's a reverse Nixon opportunity, that what Trump should do is be so nice to Vladimir Putin that he peels him away from his partnership with Xi Jinping. And if that can be done, then the position of the United States will be much improved because it will no longer face an axis of authoritarians, China plus Russia plus Iran plus North Korea, which is really the legacy of the Biden administration's quite inept foreign policy. So that's, I think, the thinking. Will it work? No. I think it's highly unlikely that Putin can be peeled away from Xi Jinping, because at this point, Russia is kind of a subsidiary of the People's Republic of China. The war effort, as you both know, in Ukraine could not have been sustained by Russia without large scale economic support from China. I'm very skeptical that any US President could somehow come between Putin and Xi Jinping. So I think the grand strategy of the Trump administration has a big downside risk. And let me tell you what I think that is. The downside risk is you shock your Asian allies, you shock even more your European allies. You do stuff that just freaks them out completely. You make this pitch to Putin, we're going to give you a sweet deal in Ukraine, and then we'll be friends. And Putin is like, I'll take the sweet deal, but I'm, I'm off to see Xi Jinping. See ya. And then the United States finds itself isolated, not because Trump's an isolationist, but because his grand strategy didn't work. And at that point, and here I'm going to cue another part of our conversation, Taiwan becomes the big issue.
- [28:50]
Richard Engel
I want to talk about Taiwan a lot. And we've talked about on this show, we talked about it on the show as the sort of big unresolved issue in the world right now. It is the, the issue that could change everything and could tip the balance of power. It could end the United States, it could end the US Empire, which has dominated the world since, since World War II and the aftermath. But before we get to China and Taiwan, and I want to get there soon, you mentioned Elon Musk a couple times, and you said that he's in this kind of co role, and you said something interesting in a recent podcast with the Hoover Institute with, with you are also affiliated with them. And it was in this context of American weakness. And I think it's important to set up the quote. You were talking about Ferguson's Law, which you write about a lot, although it's not, you say it's not named after you. It's named after another Ferguson from the Enlightenment, the great Adam Ferguson. No relation. And okay, what is Ferguson's Law? Just tell everyone, and then I'll states.
- [29:54]
Neil Ferguson
That any great power that spends more on interest payments on its debt than on defense won't be great for much longer.
- [30:01]
Richard Engel
And the US is currently doing that now.
- [30:03]
Neil Ferguson
The US crossed the line last year. 2024 was the first time since the mid-30s that the US is spending more on interest payments than on defense. And the really important point is that if you look ahead with Congressional Budget Office data, this only gets worse because the debt's very large. It's hard to see interest rates, rates coming down. And so there is this quite striking pattern where the deficit each year is about 6% of GDP. That means the debt keeps growing. That means the interest payments keep growing. And by 2040 something, there'll be 2x2 times as much being spent on interest payments than on defense. So the US has entered a zone of real fiscal overstretch. And that's, I think, one of the key reasons for thinking of the Trump administration not as imperial in its kind of ambitions, but actually the whole premise, I think, is that the United States is in a weak position.
- [31:04]
Richard Engel
Perfect. So that you set up what you were talking about, and here's the quote you said. Our whole budget is massively out of kilter. I have the greatest admiration for Elon Musk, who's the Napoleonic figure of our times. What do you mean you think he's doing this Doge crackdown in order to correct the budget, in order to save the United States from inevitable decline like other empires. What do you mean, Napoleonic? I have the greatest admiration for Elon Musk, who's the Napoleonic figure of our times. What do you mean?
- [31:37]
Neil Ferguson
Well, it's hard to think of anybody other than Elon, who has the same central role in our collective imaginations that Napoleon did in the collective imagination of the world in, say, 1800. So Elon, or Napo Elon, as I christened him a couple of years ago, is a truly world historical figure. I'm talking here about the extraordinary business achievements. The man who made electric vehicles, the automobiles of the future. That was really Elon, the man who created Starlink so that we now have the Internet wherever we are, from space, from low orbital satellites, the man who plans to colonize Mars to make us a multi planetary civilization. These are ambitions without equal in the world today. No one else is as ambitious. What was Mark Zuckerberg's ambition? To create a vast network in which people could share cat videos. The ambition of Musk is Napoleonic in its scale.
- [32:49]
Yalda Hakim
Neil he was the richest man on the planet and incredibly successful, independent of Trump. And now he's sort of this guy that's despised, where his showrooms have protesters outside and Tesla's people are setting their own Teslas alight. So it's quite extraordinary, actually, when he went into the Trump orbit. Trump, I guess, will die peacefully someday. But all of those people around him, including the likes of Steve Bannon and Elon Musk and perhaps J.D. vance, end up, you know, either there's a purge or they end up having to step down themselves.
- [33:26]
Neil Ferguson
So I was going to say that the point about the comparison with Napoleon is that Napoleon ultimately was defeated at Waterloo because he had created a critical mass of enemies, perhaps less brilliant people. But there was by 18, 14, 15, enough of those enemies for his defeat to be unstoppable. And I think one reason that Elon didn't like the Nepo Elon joke or analogy was that it implies a Waterloo. And I think it was always risky for Elon to become as directly involved in politics as he did last year, wholeheartedly backing Trump, but also campaigning for Trump, even taking the risk of campaigning in Pennsylvania, where Trump had nearly been killed on the campaign trail. The risk was even greater when he agreed to take on the Department of Government Efficiency, which I think was one of those things that starts as a troll or as a meme and then becomes real because it's so hard to deal with the federal government. The federal government is not Twitter. It's an enormously complex bureaucracy with all kinds of protections for its civil servants. And you can't actually fix the fiscal problems of the United States just by downsizing the bureaucracy. That was never likely. Even if you fired the entire federal workforce, if you just laid everybody off, it would make only a very small dent in the deficit, because most of the deficit is just transfers. It's entitlement payments into Social Security and Medicare and Medicaid. So to try to solve the fiscal problem with a new entity like Doge was rather unlikely to deliver success. Also, Elon forgot that out of a presidential election cycle, it's really hard to mobilize the base. And so the Wisconsin election that Just happened was a defeat for him. He was the one who was out there campaigning to stop a liberal judge being elected in Wisconsin. Trump was invisible, not involved. And so the defeat is on Elon. There's been a debate since last year about how long the relationship would last. And the conventional wisdom has been not long, because relationships with Donald Trump have a relatively short half life. I don't think it's perhaps time to say it's over. I think one of the characteristic features of the court of Trump is that people can be in and out and in and out depending on how things are going at this point. It's been such an important relationship. I think it was crucial really for Trump's re election that it's not that Trump and Elon are going to suddenly be frenemies or enemies. I think it's more that if you're Elon, you've got to think about the companies that you run. Tesla's been getting hammering, not so much from protesters. That's the kind of thing the media loves to amp up. The problem for Tesla is not protesters. The problem for Tesla is Chinese EVs are way cheaper and BYD is the problem for Tesla. And so Tesla sales are down. At some point, I predicted it wouldn't be politics, it would be economic pressures that would force Elon to step back from the thankless task of trying to address America's fiscal problems. But I do think he is such an interesting figure because of his risk appetite. I don't think there's anybody with his readiness to take risk and to do things that the rest of us would disregard as impossible. I remember hearing about Starlink the very first, the time I heard it, I think it may have been from him as he described what he was going to do, thinking, oh, that's completely nuts. You're not going to have enough satellites up there for the Internet to be available everywhere on Earth. And then by 2022, Ukraine's fate hinged on Starlink. If Ukraine had not had Starlink, it would not have been able to stay in the war. And it suddenly became clear that year that Elon Musk determined the battle space because it was Elon who decided where Starlink operated. And it didn't operate in the Russian occupied territory. It didn't operate, for example, in Crimea. That's why the term Napoleonic seems to me appropriate. What was the last time somebody in the private sector, a businessman, determined the battle space in a major great power conflict? You'd need to go back to the 17th or maybe the 16th century to find somebody with that kind of power who wasn't a sovereign or a president.
- [38:19]
Richard Engel
It's funny you mention Elon Musk as the Napoleonic figure. I would have thought you would have said Trump, that he is the unique historic driver who has suddenly emerged and they pop up from time to time, who's able to put his finger on the pulse of history and then change the rhythm of it to suit his will.
- [38:40]
Neil Ferguson
Yes, I think it's important not to fall into that trap of seeing Trump as a Napoleonic figure, which I don't think he is. Trump's recognizably the heir of a populist tradition that goes back to the late 19th century, a populist tradition that emphasized tariffs as a source of revenue for the federal government, that emphasized nativism, restriction of immigration, that favored easy money, was hostile to elites. There's nothing about Trump that isn't familiar homegrown American populism. And whereas I think Elon is a genius with astonishing vision and intellectual firepower, Donald Trump is a New York real estate guy who graduated to politics from reality tv. And I think we shouldn't exaggerate the extent of his powers, because although he's only the second president to get two non consecutive terms, the victory that he won in 2024 was not the landslide that it was sometimes depicted as, because the margins of victory in the last three elections have all been quite slender, depended on a small number of counties in a small number of states, and therefore a relatively small number of voters switching their preferences. This is not the stuff of seismic political change, even although I think Trump interpreted it as such in the wake of November 5th. My sense is that American politics, despite all the talk of radical polarization, in fact hinges on relatively small movements every four years in a finite number of places like Northampton, Pennsylvania, a swing county that voted for Trump in 2016 narrowly, voted for Biden in 2020 narrowly, and voted again for Trump in 2024 narrowly. These are not the great shifts that I would associate with a Napoleonic figure. Remember, Napoleon comes to par as a genius in the military domain who's brought in to salvage France because of the complete incompetence and corruption of the Directory in the late revolutionary period. I think we should not exaggerate how out of sample Trump is in the sense that I think he comes from political currents we've seen before in the United States. It's just that there never was a populist who could win the presidency. Brian William Jennings Bryan, the populist leader of the late 19th, early 20th century was a three time candidate. He just never won. There have been Trump like figures in American politics before Huey Long. It's just they never made it to the White House as Trump has. And what has propelled Trump to the White House is not a great seismic shift in American society. It's actually really quite small moves within a quite narrow range of political possibilities. So no, I don't buy the idea that Trump's a Napoleon figure, nor will he found a dynasty.
- [42:05]
Yalda Hakim
Neil, I do want to ask you about great power rivalry, competition with China. Whenever I've spoken to American generals, admirals, when you ask them if they're ready for conflict or war with China, they say immediately, yes. And I just wonder from your perspective. We've talked about a little bit, touched on the importance of Taiwan and what America might do and we know about strategic ambiguity. But from your assessment, where do you think America is at and where is China at when it comes to this rivalry?
- [42:41]
Neil Ferguson
We've been in Cold War Two for about seven years. I think it really began about 2018. And that Cold War is familiar in many ways. It's just that China has taken the place of the Soviet Union. And Trump's historical significance is that he was the first major political figure to say China's a real problem. We've got to do something about China. Because for the previous 20 or so years, the general view had been China's rise is good for us. This is what I call Chimerica. So Trump called the shift to rivalry and very quickly that became a bipartisan consensus. The key thing to notice is that first of all, it's very difficult to reduce your dependency on Chinese exports of cheap stuff, whether it's flat screen TVs or you name it. All that the Trump tariffs did the last time was to reroute Chinese exports to the US Via third countries such as Vietnam and Mexico and so on. And the second Trump trade war is designed to try and stop that, but it will be very difficult. The second point is the military rivalry here is an extraordinary thing in which China is rapidly catching up with US Military capabilities in every domain. In the naval domain, submarines, perhaps more importantly satellites, missiles. The military balance in the Indo Pacific region is tilting inexorably in China's favor, however you measure it. And the key issue is that the more Trump presses China economically, and I do think the trade war in its second version is a major shock to a Chinese economy that relies heavily on exports, the more risk there is of a confrontation over Taiwan for which the Chinese are rehearsing this won't be an invasion. It will be something like a blockade or a quarantine, and I think it will happen on Trump's watch. At some point, Xi Jinping is going to give the signal, and then Admiral Sam Poparo, who's our commander in the Indo Pacific Command, is going to have to signal to the White House. It's happening. They're starting the isolation of Taiwan. The Coast Guard ships from the Chinese Navy are encircling Taiwan. Do I unleash Hellscape, which is the current US Plan designed to deter China? If it doesn't deter China, you either have to do it, in which case we have a war between the US And China. Naval conflict, potentially the biggest naval conflict the world has seen since World War II. Or do you fold? Does the Trump administration take a long, hard look at the military options and say, you know what? It's not worth World War III to protect Taiwan, which we've long acknowledged is part of one China, and then Taiwan goes the way of Hong Kong, and that's not an implausible outcome. But if it is, what happens? Then American primacy in the Indo Pacific is over, and everybody there in Japan and in South Korea, and, of course, in Taiwan itself, will recognize that. So those are the stakes. They're the biggest stakes. If I'm right and this confrontation comes in the next three years, it will decide whether the Trump presidency is remembered as a time of American greatness, as President Trump wants it to be, or as a time when American appeasement, first of Putin and then of Xi Jinping, led to the end of American primacy and the beginning of the Chinese century. We'll see. I can't tell you which it's going to be, but I think those are the stakes.
- [46:31]
Richard Engel
Well, the stakes are enormous. We're going to have to have you back. We just scratched the surface. I feel like. Yes, we're just warming up. We were just starting to talk about Taiwan. You're telling us if Taiwan goes, it's the end of America, it's the end of the world.
- [46:45]
Neil Ferguson
As the American primacy, America would be fine. It's just that the Chinese will control the flow of the most sophisticated semiconductors out of tsmc, which are, of course, the key components in the artificial intelligence revolution. So it's not just from a military point of view, but from a technological point of view. And Cold wars are primarily technological. Soviet, US Cold War was about nuclear technology and space race, a whole bunch of other stuff. This one's about even more sophisticated technology, especially AI so Taiwan is absolutely central to that. And maybe future historians will write less about Donald Trump and more about AI than we currently envision, because we are all drawn into conversations in which Donald Trump is the subject of every sentence. But my sense is that the really world historical thing of our time is the technological advances that have produced breakthroughs in artificial intelligence, and that's why Taiwan matters. I'll maybe end on this note. The Cuban Missile Crisis was the most dangerous moment of Cold War one, but the Taiwan semiconductor crisis potentially is even more dangerous and certainly more economically consequent, because what did Cuba export in 1962? Sugar and cigars.
- [48:05]
Richard Engel
So you anticipate a similar Cuban Missile crisis, and you've written about it coming over Taiwan. At the end of the day, it was Khrushchev who decided to back down. He didn't want to have World War three with the United States, and he backed down and ended the Cuban Missile Crisis. In this case, it could be flipped. It could be the United States that was either going to send in the warships and try and save Taiwan, or President Trump will decide not to, or try and find some compromise, cut a.
- [48:37]
Neil Ferguson
Deal, which is what Khrushchev did with Kennedy in 62. Even though it looked like he'd folded, he'd actually cut a deal. And I think the deal maker in Trump is much more dominant than the war maker. He is not a war president. Trade wars, yes, but actual wars. I don't think he has a great appetite for those. Even if, in the end, he gives a green light to Israeli strikes on Iranian nuclear facilities, which I think we'll be talking about the next time I come on on the show. I think that's coming quite soon. But I don't think Trump is going to do more than just say, go ahead, make Khamenei's day and give a green light. I don't think he's going to be directly involved in that. So my sense is that the destination of travel for Trump is some great big, beautiful deal with Xi Jinping. The key question is, what are the terms of the deal? What's the deal about? And if the deal includes that Taiwan, effectively, like Hong Kong, becomes directly under the control of Beijing, that has profound implications for America's position economically and geopolitically.
- [49:38]
Yalda Hakim
So fascinating listening to you speak. We could go another hour. Neil, thank you so much. And it was actually Admiral Paparo who said to me he was ready for war, but obviously he's going to say that in a public space.
- [49:49]
Neil Ferguson
I think he is. I think I'M sure he is. I've met Sam Paparo, and he's the kind of American admiral that made the Japanese quake in their boots. But it's not up to him. It's up to Donald Trump. He's the president. He's the commander in chief. And in the end, this will be the biggest call of his whole career.
- [50:08]
Richard Engel
Neil Ferguson, thank you so much. Yalda. It's wonderful to see you. I know this is going to generate a lot of questions, a lot of feedback, and you'll have to come back.
- [50:17]
Neil Ferguson
You'll come back. I look forward to it.
- [50:18]
Richard Engel
At least, at the very least, to answer some of your critics.
- [50:22]
Neil Ferguson
Always happy to do that.
- [50:23]
Yalda Hakim
Thank you so much, Yalda.
- [50:25]
Richard Engel
It's been fabulous. Thank you very much.
- [50:26]
Yalda Hakim
Amazing. Thank you. Thank you so much.
- [50:29]
Neil Ferguson
Bye, guys.
- [50:44]
James Matthews
Donald Trump is heading back to the White House.
- [50:47]
Richard Engel
Together, we can truly make America great again.
- [50:51]
Neil Ferguson
We are in for an unpredictable but fascinating four years.
- [50:54]
James Matthews
And we're going to be following every twist and turn for the first 100 days. We'll be bringing you the latest updates and analysis first thing every morning. So join me, James Matthews, me, Martha.
- [51:06]
Richard Engel
Kelnick, and me, Mark Stone for Trump.
- [51:08]
James Matthews
100 every weekday at 6am wherever you get your podcast.