'Coming out of this crisis, the United States is likely to be stronger than its allies': Eurasia Group's Ian Bremmer

Stocks advanced Monday as investors mulled a patchwork of state plans to slowly roll back social distancing measures. U.S. crude oil prices renewed their slump after four straight sessions of gains. Ian Bremmer, President of Eurasia Group, joined Yahoo Finance's Jen Rogers, Myles Udland, Andy Serwer, Rick Newman, and Akiko Fujita to discuss his outlook for the United States amid COVID-19.

Video Transcript

JEN ROGERS: I'm going to bring in our first guest right now, Ian Bremmer with the Eurasia Group. Ian, you are there. I see you. Hi, we're glad to have you on this.

Hey, Ian. I read a couple of your notes, and I read it in one part that you think we could be in a three year crisis. And that really stood out to me, because here we are, reopening. And the market and investors seem really optimistic that this maybe is a three month crisis. Are we under appreciating the impact of COVID-19?

IAN BREMMER: If you're saying the people in the markets actually think it's going to be three months, I hope they don't think that. I mean, the markets are short term in orientation, but I mean, any CEO I'm talking to understands that it's a very long time before we get back to normal. I mean, there's a difference.

Because we're seeing the peak, we tend to think that, well, it must be like a mountain. So both sides of the mountain are the same. It's like Mount Fuji or something. But in reality, it's much more like a tidal wave, where you have this massive initial crest.

And then after that, the water is much higher for a long time with a lot of additional swells. And we all know that as we start opening, bits of this economy that people-- the government can make a decision. But that's different from corporations making a decision. That's different from consumers making decisions to get on a plane, or to go to a restaurant, or to go to a ball game, even if those things are open.

And that's different from saying that those things are all sustainable when you only have 50% of-- I mean, we've already heard from our-- even our government leaders are telling us that social distancing is clearly going on for months and months, not weeks and weeks. And that's the Trump administration that's in an election period focusing on getting the economy moving again. Until we have a vaccine, life is going to be different, and that's going to cost a lot of people a lot.

- Hey, Ian. You are so thoughtful when it comes to geopolitics. That's kind of your bailiwick, so we've got the coronavirus over here and geopolitics over there. And I'm curious. How do they meet? In other words, how's the coronavirus going to change the political sociopolitical calculus of the world?

IAN BREMMER: A few ways. First is that you're going to see a lot more inequality. We already saw that this us versus them mentality inside democracies was growing and leading to more political polarization anti-establishment sentiment when the markets were going well. Now we're facing the worst economic recession of our lifetimes.

That's going to disenfranchise a lot more people. It'll lead to more political polarization, which means that the democracies, the advanced industrial democracies, their models globally will not be as strong. They will not show as much leadership.

At the same time, the United States and China, which have no trust for each other, will see less interdependence. There'll be more decoupling. As we bail out our companies, we're not going to say, it's OK for taxpayer money to go for lots of jobs to be in China.

We want that capital. We want that manufacturing. We want those services back in the United States, more localization. That's already been happening in tech, and that means the potential for an outright Cold War between the United States and China is getting a lot larger.

But a final point is that, even though the United States isn't showing much leadership here, and China clearly is going to have more influence. Because their economy has already started up while ours is shut down. We should recognize that coming out of this crisis, the United States is likely to be stronger than its than its allies compared to going in.

I mean, think about the resilience of the American banking system compared to Europe's in this environment. Think about how important tech companies are getting us through this and coming out. America dominates the tech space. The Canadians, the Japanese, the Europeans are nowhere.

Energy, food, you know, we know that those supply chains are getting disrupted. How great that we produce this stuff ourselves in this environment? You know, on the one hand, that means the dollar is going to be stronger. But it also means that America's orientation towards unilateralism and not leading a multilateral set of institutions with our allies on board, that's going to be harder.

That's obvious under Trump, but I would suggest that even under Biden, you're not going back to the way the country was led under Obama. And I think a lot of people still think it would be. That's really going to change post coronavirus.

MELODY HAHM: Ian, I want to ask you about something. Obviously, the US and the Chinese are watching closely, which is kind of the headline that broke over the weekend. Rumors all over the place about the state of or the health of Kim Jong-un.

And I know that nobody has this sort of direct source inside North Korea, so speculation is speculation. But I'm wondering how you're viewing this situation right now, whether it is the potential for Kim Yo-jong to move up the ladder, or you know, the potential of weeks on end without knowing really the state of Kim Jong-un. How do you view that dynamic, and what's the risk on that front?

IAN BREMMER: I mean, obviously, I have exactly as much intelligence on the ground as you do on this, which is not-- so it's hard for me to speculate. But what we do know is that two weeks of radio silence from the North Koreans on the state of their leader when there's all of these rumors that he's dead or in a vegetative state. Something is clearly wrong.

That's not the way they would run this country historically. They just had a major national holiday. No word from the Supreme leader. So I think that, at the very least, we can say, he probably has had a serious health misstep and is not viewable by the public right now.

Now, if he's gone, certainly, the only leader from his family that is prepared to take his role is Kim Yo-jong, his younger sister. And that is what one would expect, if it wasn't such an incredibly misogynist society, where North Koreans, any North Korean you would talk to would say, it's inconceivable a woman could run it. So I don't know how to deal with that. I have no idea. But what I do know is, if there's uncertainty, if there's an internal fight, if there's any sense that there's military confrontation domestically of this nuclear power, and Kim Jong-un is gone, the Chinese are coming in.

Because they're going to want to secure the borders, secure the nukes, and ensure that their client state is not in disarray and imploding. And that will lead, even though that's the least worst option for the Americans. You will be on highest alert, the US, Japan, South Korea. The potential in an environment, where the US and China have the worst relations we've had in decades. The possibility of accidents and escalation would be real.

RICK NEWMAN: Ian, hey. Rick Newman, here. You, a moment ago, mentioned maybe we'll have President Biden a year from now. Trump looks pretty shaky on reelection. If we do have President Biden, what changes in a big way?

IAN BREMMER: He said, he would rejoin the Paris climate talks immediately, which, of course, was deeply unpopular. He would be in favor of a stronger Europe. Trump opposes a strong Europe. He thinks it's bad for United States. The EU, Trump's been aligned with the euro skeptic movements. Biden would not, and certainly his personal relations with a bunch of leaders that are interested in US global leadership multilateralism.

Here, I'm thinking about the Canadians, the Germans, the French. Those relations would significantly improve. But again, I want to be clear. Biden would become president in the teeth of the worst economic cataclysm of our lifetimes at a time when overwhelmingly, the focus would be on, how do we get 15% to 20% unemployment down to a manageable level? What do we do for these people? Do we need universal basic income? How do we get a vaccine going?

Overwhelmingly, his focus is going to be domestic, and he'll be punished if he doesn't do that. And the interest, the support that we will be getting from allies in that environment will be a lot less than it would have been historically. I also think the likelihood of a Cold War with China goes down, if Biden becomes president, because he's not going to be as interested in picking a fight for political reasons.

I think that the general view is that, if Biden becomes president, we now have American leadership like it used to be. I strongly, strongly disagree with that. The Europeans are weaker and more divided. The Russians are in serious decline and trying hard to undermine us.

The Chinese are in a stronger position and want to build competitive architecture. None of that changes, if Biden becomes president. I would argue all of those things have been much more important to the way we think about the global order than the shift from Obama to Trump, and they will prove to be more important than a potential shift from Trump to Biden.

MYLES UDLAND: Hey, Ian. It's Myles, here. I want to pick up on something you mentioned there, which is Europe. We're so focused here on the US around case counts and getting this under control. Europe has a huge task ahead of them, digging their economy out of this, and they have to coordinate multiple nations, their fiscal policy with the ECB. What's the challenge from your vantage point facing Europe over the next nine months?

IAN BREMMER: And I mentioned, they don't have the tech companies, right? So they're going to have to be takers, not makers as the Americans. I mean, they're the ones that want privacy. We were talking about breaking them up, Elizabeth Warren. All that goes out the window, so the Americans are going to be more important to these guys going forward.

You know, the ability of the Europeans to ensure that there is enough money for bailouts and that everybody can blow out their deficit, take on more debt, that could happen. But the idea of debt mutualisation between the highly indebted no growth south and the more productive Germans, and Dutch, and the rest, that's not happening. I mean, look, the way I would think about coronavirus is not that it changes the world so much as it speeds up a whole bunch of things that were already happening.

It takes 10 years and compresses them into one and a half, so we knew that there was growing inequality. But now we get 10 years of inequality in 18 months growing. We knew that US, China didn't trust each other. It was heading towards confrontation. We get 10 years of that in 18 months.

We knew tech was disrupting the world, but we get 10 years in that 18 months. We knew that Europe was fundamentally unsustainable in terms of what we saw with the Greek crisis between the Germans and the Italians now. That's going to be driven forward much more quickly as well. And when you compress that much unsustainability, geopolitically and economically, a few things probably break. That's what we're going to see happen.

JEN ROGERS: So in terms of what we know, we also know a vaccine is incredibly important. We're seeing the race for this vaccine. It's spread across many geographies. How important do you think it is to be the country, the first country that finds a vaccine? Does it matter?

IAN BREMMER: Oh, I think it matters. Look, God bless Bill Gates. I mean, I was surprised this weekend that he was as much of an apologist for China as he turned out to be. He really didn't want to do any-- like they're not responsible for anything. That's a distraction, which I don't think is true.

But Bill Gates is doing more than anyone to try to ensure that we have a global vaccine that everybody gets, and I hope he's successful. Because the reality is, you know, there's not going to be the ability to produce this vaccine for billions of people in a month or two when it is created. And it's more likely to be created by an American company, maybe European, unlikely to be Chinese.

Not everyone is going to get it at the same time. And as we see, I mean, we've seen how politicized PPE has been. We see how politicized tests have been, ventilators have been.

I mean, think about what that is going to mean when people can or cannot get a vaccine. And that is the difference between you and your family going back to the economy fully, you and your country getting back up and running fully or not. I mean, if you think we have a geopolitical fight over medical supply chain now, it is nothing like what you're going to see in the first six months after a successful vaccine is created.

- Hey, Ian. Last question here. I'm wondering if you consider the generational rift that's out there in terms of younger people being concerned, say, about the environment and concerned about older people bailing out the economy, and younger people having to pay for it? Is that something that worries you?

IAN BREMMER: A little bit. I mean, I guess, I'm personally less worried about the generational right now and more worried just about double digit numbers of working and middle class people in the advanced industrial economies that aren't going to have anything productive to do. I worry about a move towards a global middle class for all of our lifetimes around the world. All of these people out of poverty now going back into poverty.

I think as Americans, we're always looking for the bright side of everything. And even in the worst crises, we say, OK, well, there's some losers, but there's some winners too. Let us understand.

I mean, yeah, tech companies will do better. There will be some stocks you can pick. Humanity is not going to do better coming out of this crisis. It's going to do worse.

Emerging markets will be submerging. The developed world will not have the same quality of life. Inequality will be a lot greater. Nobody wins. The Chinese may be in better relative position. These will be some poor countries.

It would be vastly better for China if this had never happened. There is no country in the world that you're going to be able to go back in three, five years time and say, we came out better because of that coronavirus crisis. And I think that means this is a time for us to learn lessons to become stronger going forward, but not to pretend. Because this is going to be tough.

JEN ROGERS: Ian Bremmer, you always give us so much to think about. I really appreciate you giving us time today. A President of Eurasia Group and GZERO Media, Ian Bremmer, stay safe.