Ian Bremmer talks democracy in America, U.S.-China relations, Kazakhstan, and climate change

Eurasia Group and GZERO Media President Ian Bremmer joins Yahoo Finance Live to discuss the insurrection that occurred a year ago and how it affected America politically, as well as China's role on the world stage, the crisis in Kazakhstan, and the energy transition to combat climate change.

Video Transcript

AKIKO FUJITA: As we take a look back on this day one year ago, I want to bring in our first guest for the hour. We've got Ian Bremmer, Eurasia Group and GZERO Media founder and president. And Ian, you know, I was looking back on those images from a year ago, thinking there was a sense that this was kind of the tipping point in the political discourse. And yet a year on, it kind of feels like we're back to where we were. You look at more recent polls. It shows a majority of Republican voters still believe that President Trump won that election. So as we reflect on what happened on January 6 last year, how do you think the political discourse has actually changed?

IAN BREMMER: If anything, it's sharpened. It's intensified. I think Americans that are thinking about and watching the events of January 6 one year later are responding to it in two completely different information systems. A majority, but a small majority, a slim majority, believe that this was traitorous behavior and the worst day for American democracy in our lifetimes. A significant minority of Trump supporters believe that these were patriots called upon by their legitimately reelected president to avoid an election being stolen.

Now that's false, but that doesn't stop them from believing it. It doesn't stop former President Trump from promoting it. And it doesn't stop either the Republicans in office, in House and Senate, and the media from supporting him. So, you know, I mean, you look at January 6, and those images, they look like what's happening in Kazakhstan right now, frankly. But the reality is that US democracy is in crisis. I don't think there's any softer way to put it.

I mean, this clearly couldn't happen in any other advanced industrial democracy. We've just had elections in the last few months in Germany and Japan and Canada. We're going to have some in South Korea and France the next few months. They will all be free and fair. They will all have peaceful transfers of power. They will all be seen as legitimate at home and globally, that you can no longer say that about elections in the United States of America.

AKIKO FUJITA: And that raises the question, Ian, about how we go ahead from here, go forward from here, when you've got the midterm elections looming. We've seen the Republicans double down on President Trump, those like Liz Cheney, who have criticized him and questioned his role in the insurrection, clearly getting pushback back home. How do you think all of this manifests itself in the upcoming elections?

IAN BREMMER: Well, the Republicans are almost certainly going to win the House of Representatives in November. I mean, literally almost certainly. And you see that with all of the Democrats, about 25 of them now, that say that they're not going to even bother to stand for reelection because they see the writing on the wall that includes committee chairs and, you know, who know they're not going to be in majority. That may well happen in the Senate as well. There are also key gubernatorial elections and state legislature elections that are happening in key swing states that are critical for certifying the 2024 election.

So I mean, how does this play out? This is all happening notwithstanding the fact that the putative leader of the Republican Party is the former president, who is continuing to argue day in and day out that Biden is an illegitimate president. I think it's very clear that you're going to see 2024 as a more significant political crisis for the United States than 2020 was.

ZACK GUZMAN: Yeah, and Ian, I mean, when we look at the global picture, too, Eurasia Group out with their top risks 2022. Always love looking at how you guys think about where we're at. And obviously, that's very much the domestic situation. But when you back up and kind of look at the global picture, I mean, there's a lot of risks to point to.

You can take your pick in terms of China right now and relations there certainly not improving at all. You've got Russia as well to add into the mix. And you do wonder kind of what can be solved in terms of outside problems when internally, the kind of division you're talking about right now isn't getting any better as well. So which one would you say is a bigger risk to watch on the geopolitical stage there in 2022?

IAN BREMMER: Well, I mean, given that we've just been talking about all of this depressing stuff at home in the United States, which isn't going to get fixed, maybe I think looking at the 2022 lens, we should start with some things that are more positive, which is the fact that I've never been more optimistic since the pandemic started that we are about to move towards endemic status, where the advanced industrial democracy is within weeks will be effectively living with the virus. Far more cases, far fewer hospitalizations, far fewer deaths, far more tools to be able to respond to and treat COVID. And that's a really big deal. And the United States is, of course, leading the world in having the access to those tools, even if we don't all take advantage of it.

Furthermore, the most important geopolitical relationship in the world, the United States and China, is, frankly, not facing a crisis right now. We don't trust each other at all, but we do both recognize that we need to continue to do a lot of economic business with each other-- this is Yahoo Finance I'm talking to-- because the economic relationship is so significantly interdependent. So, yeah, we're going to have a diplomatic boycott on the Olympics, but all of our corporations are still sponsoring it. NBC is still covering it. All of our athletes are still going. And that'll be just fine.

So I don't want to overstate the idea that the world is on flame right now. And I also want to be clear that even in areas that you need true global coordinated leadership, like on climate change, there's been a lot more progress in the last 12 months than a lot of people would have expected, even though the US and the Chinese are not leading that progress. It's coming from other places. It's coming from Europe. It's coming from Germany, where they expect to have 80% of their electricity from renewables by 2030.

And that's an industrial economy. It's not a service economy. It's coming from big banks that are moving towards renewables, away from fossil fuels, from corporations, from Japan, from Canada. So I mean, it's not as if the fact that the United States is facing this very significant crisis of democracy means that all is lost. But for those of us that have grown up in a US that thought of itself as not only the indispensable nation, but also an exceptionalist power, we just can't say that anymore.

AKIKO FUJITA: Ian, on the issue of China, US-China relations aside, there is a sense that there is a real pivot happening in the domestic economy. We've obviously been watching really closely the crackdowns that have been happening on every sector from tech to education. You've got Xi Jinping at the end of this year likely to be able to continue on with yet another term.

And then you've got US corporations who are sort of caught in the crosshairs now, especially on things like the issue of Xinjiang. And there's a calculation that's happening, whether, in fact, the growth still outweighs the political risks of doing business in China. Is China still a good investment?

IAN BREMMER: Well, I think that China is presently going through a kind of authoritarian populism. In the United States, we have a US foreign policy for the American middle class. That's Biden. You have Make America Great Again. That's Trump. I think that Xi's common prosperity is focusing on a policy for the Chinese working and middle class. I don't know if you know this, Akiko, but China today is more economically unequal than the United States. And China is an ostensibly socialist economy, right? That shouldn't be happening. And Xi Jinping is trying very hard to address that.

And if that means breaking some eggs in terms of local Chinese corporations and what they are and aren't allowed, the kind of wealth they can amass, the kind of business practices that they can have for technology companies and consumer internet, for video game companies, for educational tutors that are allowing the wealthy to do better, but not the Chinese poor, their equivalent of the Varsity Blues scandal we had in the United States, they're going to take action.

And so clearly, this is creating more concern about Chinese growth and the sustainability of that growth. This is not the free market and the invisible hand, right? But, you know, I talk to CEOs of Western companies literally every day. And I will tell you that on balance, the majority of them are planning on doing more business in China over the next 10 years, not less. And the reason for that is simple. It's because China's on track still to be the world's largest economy by 2030. And corporations ultimately want to be where their markets are going to be.

So there's more uncertainty, there's more risk, and there is some decoupling going on for those involved in consumer internet and other strategic sectors where the Chinese government is making life really hard. But if you look at the broad variety of sectors that comprise the American economy, on balance, the US is going to do more, not less.

And by the way, the Biden White House completely understands that and is formulating policy with that in mind. They know that they lost votes in 2020 by seeing-- this being seen as weak on China, Beijing, Biden. And they don't want to do that again, which is why they have the diplomatic boycott, which is why they say that China is committing acts of genocide against their own people, the Uyghurs in Xinjiang. But the reality of US foreign policy towards China is to avoid crisis precisely because our economies are enormously interdependent. And that's not going to end anytime soon.

ZACK GUZMAN: Yeah, and as you rightfully point out in the graph that we're showing here, trade continues to kind of rebound after that tough talk that we saw under the Trump administration and the pandemic as well. But, you know, we've heard from other people, including, on our air, DoubleLine founder Jeffrey Gundlach, talking about why he thinks China is uninvestible right now, concerns about maybe capital are getting confiscated.

When you back up, though, and look at what the geopolitical implications of China may be filling the void that the US might be leaving now on the global stage-- it certainly started with President Trump kind of being a hands-off leader when it comes to global affairs-- does China step into that role to kind of being the police power now on the global stage? I mean, we're kind of already seeing bits of some open problems if you look at Kazakhstan and elsewhere right now. How do you see that playing out?

IAN BREMMER: Yeah, Kazakhstan, Ukraine, Ethiopia, Syria, the Sahel, Venezuela, Myanmar, Haiti. I mean, there are a lot of places that are on fire right now. And the Chinese are stepping into the breach in absolutely none of them. This is not a Cold War between the Americans and the Soviets where we were fighting over every piece of territory, and everything had strategic import because it was East bloc or West bloc.

This is a reality where the Americans no longer want to be the global policemen, and the Chinese are having none of it. So the United States pulls out of Afghanistan, that means no one's in Afghanistan. It doesn't mean the Chinese are operating in go into that vacuum. In China's own backyard, yes, of course. There's more pressure on Taiwan. Hong Kong, they've completely integrated. They're going to do more around the nine-dash line. And they're fighting with us around the South China Sea.

And that's why we created AUKUS, That's why the Quad exists. So there are tensions that are growing in Asia itself. But around the world, the much lauded Belt and Road from China, they're investing about 10% to 20% now of what they were in Belt and Road seven, eight, 10 years ago. And the reason for that is because China is focusing, like the United States is, much more at home.

AKIKO FUJITA: You mentioned Kazakhstan. Certainly, things really escalating over the last several days. And, you know, we started the year by talking about Russia and the concerns around their military buildup on the Ukraine border. Now you've got Russian troops moving into Kazakhstan, granted that Kazakhstan's leadership had said, well, we asked them to come in as part of this military alliance. What's playing out in Kazakhstan right now, is that really about rising gas prices, or is there something larger at hand? And how do you think Russia-- this allows Russia to further exert its influence in the region?

IAN BREMMER: Well, I mean, we're talking about 3,000 Russian paratroopers, so the size of that military intervention, the peacekeepers so-called, is marginal. They're unlikely to be involved in direct fighting against local Kazakhs. It's more bucking up and bolstering the Kazakh army so the special forces can do their thing and clear out the opposition.

I think this feels more to me like Belarus. It's a repressive authoritarian state. Nazarbayev has been in power basically since 1991, when Kazakhstan became independent. The economy has not done very well. The people are angry. And yeah, gas prices came up. And suddenly, that-- you know, that was the last straw for them. This is a tough economic environment. And living under a kleptocracy doesn't make you very happy. There's not a lot of trickle down going on in Kazakhstan.

There's definitely a sense in Russia that if that can happen so quickly and so surprisingly in a country like Kazakhstan that they thought were stable, what about in Russia? I mean, Russia economically is doing OK right now. They're going to be running a surplus this year because energy prices are higher. But might Putin need to worry more about tough economic sanctions from the West? Might he have to worry more about the consequences if he were to invade Ukraine, especially given the fact that the Americans and the Europeans together have said what economic costs and consequences he'll pay?

So on balance, I actually think the events of the last 48 hours in Kazakhstan should make Putin a little bit more cautious in circumspect about the actions he might be willing to take in Ukraine. But I'm sure he's not going to display that in his diplomacy with the Americans, the Europeans, and NATO over the next week.

ZACK GUZMAN: And Ian, we started with domestic issues. Let's wrap up with those as well. And, you know, one of your risks, as you point out in the report, too, is looking at what happened with the push when it comes to climate change and green energy and policies here and around the globe, really.

And it's been interesting to kind of watch the bounce back in oil prices here and President Biden's decision to kind of tap the Strategic Petroleum Reserve in what some might say was a way that hadn't been tapped really before to kind of enter into the price arena. Talk to me about what you're seeing there in terms of, I guess, grading the progress and then maybe uncoupling of some of that progress as we move into 2022.

IAN BREMMER: Yeah, well, look, when you're facing inflation at 30-year highs, and no one was expecting it in the Biden administration at the beginning of the year, that was driving heavily on his popularity levels in the United States. So what are you going to do? That's part of why they unwound the tariffs, the Section 232 tariffs on steel and aluminum with the Europeans, and they made that clear. It's part of why they're talking a little bit about whether they might want to take some of those tariffs off with the Chinese that were put on under Trump. But it's clearly what was behind pushing OPEC to push out more production and the release from the Strategic Petroleum Reserve, anything you can do to make life for the consumers a little bit better.

Look, I think that there was more progress on climate in terms of net zero commitments on carbon, in terms of methane emissions, in terms of deforestation commitments, and reducing it, as well as carbon pricing coming out of the COP26 summit in Glasgow, than most had expected. And I think that the politics of that being driven by populations around the world, especially young people around the world, that are saying you are ruining our planet, and we're going to inherit it. We're really angry about it, so let's move towards renewables faster.

Well, the fact is the politics are moving faster than the infrastructure for renewable energy. And that means prices are higher. And that means some backsliding as you need transition energy to continue to run your global economy. Natural gas most importantly, but a bunch of oil, too, and of course, whether or not nuclear is considered renewable, a big debate that's happening in Europe right now, the French and Germans on opposite sides of that. So this is largely a positive story for people that are hoping that the world is finally going to start addressing more seriously climate change realities. But getting from here to there is going to be a challenge for everyone that has been relying on fossil fuels for our lifetime.

AKIKO FUJITA: And we've already seen the challenges of even passing legislation for bolder climate policies here in the US, something we're going to be watching closely. Ian, it's always good to have you on the show. Ian Bremmer, Eurasia Group and GZERO Media founder and president.