A Bloomberg report leads me to the Eurasia Group, a consulting firm that advises investors how politics will affect business, and its report on the Top Risks of 2017. The Eurasia Group says the election of Donald Trump caps a movement toward a leaderless world and the most dangerous geopolitical world since World War II:
It’s been six years since we first wrote about the coming G-Zero world—a world with no global leader. The underlying shifts in the geopolitical environment have been clear: a US with less interest in assuming leadership responsibilities; US allies, particularly in Europe, that are weaker and looking to hedge bets on US intentions; and two frenemies, Russia and China, seeking to assert themselves as (limited) alternatives to the US—Russia primarily on the security front in its extended backyard, and China primarily on the economic front regionally, and, increasingly, globally.
…But with the shock election of Donald Trump as president of the US, the G-Zero world is now fully upon us. The triumph of “America first” as the primary driver of foreign policy in the world’s only superpower marks a break with decades of US exceptionalism and belief in the indispensability of US leadership, however flawed and uneven. With it ends a 70-year geopolitical era of Pax Americana, one in which globalization and Americanization were tightly linked, and American hegemony in security, trade, and promotion of values provided guardrails for the global economy.
In 2017 we enter a period of geopolitical recession [“Top Risks 2017: The Geopolitical Recession,” Eurasia Group, 2017.01.03].
Eurasia Group notes the problem isn’t just a U.S. withdrawal from global leadership; they say Trump will be more hawkish than Obama about projecting U.S. power, but will only do so for selfish interests, not for the sake of preserving global order. If China continues to step into the role of world leader, other nations will align with China, and an “America First” policy overseas will have to fight an ever-growing pro-China alliance. Fewer European friends will turn out for our side of that fight, since Trump will be cozying up to the Russian dictator who makes their lives difficult.
Other top risks for 2017 include Chinese overreaction, weaker Germany, no progress on economic reform, Middle East instability exacerbated by technology, politicization of central banks, tension between Trump and Silicon Valley, Ergodan’s authoritarianism in Turkey, North Korean nuttiness, and (a completely new problem on my radar!) political instability in South Africa.