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- The Impact of Biden vs. Trump on Globalization - Insights by Peter Zeihan
The Impact of Biden vs. Trump on Globalization - Insights by Peter Zeihan
Explore the repercussions of the ongoing conflict between Biden and Trump on the globalized system, labor force, and investment opportunities. Learn how external factors influence energy and commodity supplies, while analyzing the key pillars supporting German success in a globalized economy.
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of external funding and more importantly external labor because their labor force is in a state of collapse.
So the only way we can go back to 2020 in terms of energy and commodity supplies is
if we have the war resolved or at least settled overnight and
then someone steps forward with at least a trillion euro worth of investment not for Ukraine,
for Russia.
I don't see that as being even remotely in the cards.
German success these last 75 years has been based on three factors. Number one, a very high level of
labor skill for precision manufacturing. Number two, access to various industrial bases throughout
the European space in order to build a differentiated supply chain system for doing the
parts of the labor system that are not as capital intensive and not as labor intensive and not as
skill intensive. So basically, Poland is your Mexico to oversimplify. And then third, a
globalized system that allows the Germans to access low cost, high reliability, imported
raw materials, especially energy, but also end markets that can absorb all of this product
because the Germans produce significantly more product than they could ever consume,
not just in Europe, I'm sorry, not just at home, but in Europe as well. All three of those pillars
are now gone. The German population has been aging for decades and this was always going to be the
decade that the bulge in the German population moves from the 50s and early 60s into mass
retirement. So the labor force is no longer there. Second, the European system, the differentiated
supply chain, most of the countries that Germany has integrated with have demographics that are
just as bad. So Poland is actually aging faster than Germany, they're just a
little bit younger, but the Netherlands is nearly as bad, Austria is nearly as
bad. So the ability to main the productive system from a labor point of
view is going to get significantly weaker. And then probably third most
importantly, the Russian stuff's gone. It's not coming back. And as we've seen
in the United States, people around the world are celebrating that it's Joe
Biden and not Donald Trump.
But with the exception, the one exception of Airbus, Boeing,
that's spat.
That one has been put to the side, partially resolved.
With the exception of that, every trade dispute
that Donald Trump initiated, Biden
has doubled and tripled down on.
And he's now putting industrial policy
in the mix for the first time in the United States
since the 1940s.
And this means that the United States is no longer
interested at all in maintaining the globalized system.
The deal that made globalization work was that we will patrol the ocean so that anyone
can trade with anyone and access anything and we will leave our markets open if you
let us write your security policies to fight the Soviets.
You may have noticed in all of the deal making that the Biden administration has done around
the world and especially in Europe, that's not the deal anymore.
All the security agreements are purely bilateral.
There are no economic hangers-on.
And Biden is taking the American economy home and basically shutting its doors to one region
after another, and that includes Europe as well.
And that leaves Germany with China.
And if you think that your dependence upon Russia has generated some interesting geopolitical
exposure, just wait until we get to a real argument between the Chinese and the Americans.
Sure, let me start by saying I do consider myself a green.
