3 Takeaways - Zanny Minton Beddoes on America, China, and a World in Flux (#262)

Episode Date: August 12, 2025

The global order that brought decades of peace and prosperity is coming apart. The Economist’s Editor-in-Chief Zanny Minton Beddoes takes us inside the world’s power centers, where America is both admired and doubted — and China’s influence is on the rise. She reveals how shifting alliances and economic rivalries are rewriting the balance of power — with consequences that will touch us all.

For decades, the post-war world offered a sense of structure, anchored by institutions, shared rules, and stable alliances. Today, that scaffolding is cracking. Trust is fading. Power is shifting. The global order is coming undone. What will the new global order look like? And how does the world see America and its role? Hi, everyone. I'm Lynn Toman, and this is Three Takeaways. On three takeaways, I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers, and scientists. Each episode ends with three key takeaways to help us, understand the world, and maybe even ourselves, a little better. Today, I'm excited to be with the Zanny Minton Bet Us. She's the editor-in-chief of The Economist. where she leads global coverage of politics, economics, and international affairs. She has spent decades analyzing the forces shaping global power, from boardrooms in London to policymaking circles in Beijing and Berlin.

Known for her clarity of thought and global lens, she brings rare perspective on how America is viewed abroad and how the world is navigating an era of deep uncertainty and change. Welcome, Zanny, and thanks so much for joining three takeaways today. Thanks very much for having me. It is my pleasure. You are based in London and our editor of The Economist, a global news and international publication. You also spend considerable time in the United States. What's something that international observers admire about the U.S.

that many Americans overlook or take for granted? Oh, lots of things. I think it's easy to forget if you are in the United States, where perhaps you tend to focus on the challenges you face just how admired the US is around the world. I think the US economy is the envy of the world. It has performed spectacularly well relative to other rich country economies. It's much wealthier. But I think more fundamentally, it is the idea of America and what it stands for, the shining city on the hill. Everyone around the world knows. that phrase and thinks of America as a place where anyone can go and once they are there can make the most of their lives. It's a place that is built by immigrants with good ideas and innovation and that sense that you can make a life for yourself in America. I think it's a very powerful animating force. And I think that's the third one, which again may not be focused on so much by people inside the United States, is that the rest of us are very aware

that we live and have lived in an international system, an international order, as political scientists pretentiously call it, which was created by America after the end of the Second World War in an kind of moment of enlightened hegemony. And the US was the undisputed

most powerful country in the world. And it created a system of allies, alliances, rules, institutions, which was the kind of basis for the prosperity and peace that the world has seen over the last eight decades. Do people still regard it with that positive feeling? Does it still evoke that admiration or is there anxiety ambivalence or something else now? If you look at opinion polls around the world, you can certainly see that in many places, Brand America has taken a bit of a hit. And certainly everyone is wondering where America is going and what kind of an America is being created right now.

Because clearly, you know, the last few years, but particularly the last year, America's economic and geopolitical stance has been fundamentally different. The Trump administrations make America great again. America first set of policies are much more about using America's economic clout. to, as they would put it, reshape the world towards a fairer deal for America. Now, people outside America broadly think that America benefited from the system as it was and that actually this might be a somewhat short-sighted thing for America to do. But certainly, the US having created a system of rules and institutions, is now essentially dismantling that system very fast.

So, yes, there is a fair degree of uncertainty about what America is doing, right now. Fear in some places, certainly in Europe. Now, there are other places in the world, particularly places run by authoritarians that are probably very happy about this. So kind of how you see what is happening in America, depends a bit on what your perspective is, but certainly everyone around the world is very aware that America is changing and changing quite fundamentally. Can you talk a bit more about the international system, what it was, how it benefited both the US and other countries? After the end of the Second World War, which of course came after the horrific economic collapse in the 1930s, the U.S. as the economy that came out by far the strongest economy in the world and really the victor was instrumental in creating, first of all, a system of economic rules and institutions, the World Bank, the World Trade Organization, the International Monetary Fund, all of which were designed to create.

create the basis of an open trading system and one which over subsequent decade, trade barriers were reduced. At the same time, the United Nations was created to be the sort of underpinning of an international order, which was about creating the conditions for peace and stability. Now, we immediately pretty much straight away had the Cold War and the world divided between Western countries and countries in the Soviet bloc. But nonetheless, this machinery, systems of international norms, the UN Security Council, which had five permanent members, and then the broader membership of the United Nations, was really seen as the underpinning of a global system. And then the third element was the system of military alliances that the United

States created. So in 1949, NATO was created, the North Atlantic Treaty Organization, which was essentially the United States, Canada and countries in Europe to defend itself collectively against the Soviet Union and its satellites. And the US built up not formal alliances, but very close relationships and treaties with countries in Asia too. These sort of magnified US military power, this system of alliances, but it was very clear that the largest economy and certainly the most powerful military force in the world was the United States and that the United States undertook effectively to be the sort of underwriter

of this system. It was United States military power that keeps international shipping lanes open. It's United States military power that deters aggressive action from, you know, would-be aggressors. That is a system that the US built up. All of this was done by enlightened leaders in the United States who realized that prosperity and economic recovery in the rest of the world was the United States interest. And they realized that a system of multilateral trade where there were rules and where countries couldn't simply raise tariffs on one country or another, that would benefit the United States. And it has indeed benefited the United States. The multilateral trade system, and I'll focus on trade, is a system which at its core has a very

simple rule. It's called Most Favored Nation principle. What it basically means is that that in most cases, if you set a tariff against one country, you agree that you will set the same tariff against every country. So you don't have different deals with different countries. And that keeps international trade simple and open. And the goal was gradually over decades to reduce those tariff barriers. And the United States reduced them more than other countries, but everyone gradually reduced their barriers. So we had the ingredients for what's become known as globalization, where the trade flows between countries increased massively. What we've created in the past few months, what President Trump has created, is essentially

to rip up that system, as far as the United States is concerned, and to set up a system, as he calls it, of reciprocal bilateral tariffs, different tariffs with different countries, different deals with different countries. This has caused a huge amount of uncertainty. You don't know when President Trump is going to threaten to. raised tariffs again. It also means that the overall average tariff the United States has now is the highest in a century. It's nearly 20%. It hasn't been that. That's 10 times higher almost than it was before Liberation Day. This is an enormous increase. And as we're speaking in the summer of 2025, we haven't yet seen the consequences of this, but we are rapidly seeing

the dismantling by the world's biggest economy of this. decades-long system of trade. So everyone loses, I think, from this new tariff-based world. America is currently very polarized. As you know, Democrats and Republicans vilify each other, and Congress, under both Democratic and Republican presidents, has been unable to pass legislation in major areas, such as immigration. From abroad, is America's political polarization seen

is a unique dysfunction, or do you see it as part of a more global trend? I think the dissatisfaction with existing political parties, with existing political positions, is widespread. You see it in Europe, too, where you see a backlash against traditional mainstream parties. The difference with the United States, I think, is partly the narrowness of the divisions. I mean, broadly, it is a 50-50 country. The extreme, nature of the polarization, which I think is fueled by the different media ecosystems and that the two sides live in. I mean, I have always, when I go to the United States, I force myself to watch 15 minutes of cable news in the morning and 15 in the evening. And if I

watch MSNBC in the morning, I'll watch Fox in the evening or vice versa. Not because it's necessarily fun, but all good for me, but because it is a very powerful window into the polarisation, you're talking about. I mean, it's not just that people have different views. They live in different ecosystems with different facts. It's just extraordinary. And that, I think, is more extreme, certainly than in England. In Britain, you know, we still have the BBC, which although widely criticised, does provide a sort of anchoring in terms of facts and the sort of news agenda. And the other difference is that in many European countries, you have a different political systems that mean the way that the polarization or the way that dissatisfaction has manifested

itself has been the decline of traditional parties and the scratching of lots more extreme and fringe parties. And so the consequence of probably what is a similar dissatisfaction has been a very different political setup. So less polarized and more fragmented. People are concerned about uncontrolled immigration. What they see is uncontrolled immigration. People are concerned about the pace of change. People in lots of countries are worried that their children will have a less good future than they did. It's very corrosive in a democracy if a plurality of people think that their children will be worse off than they were. So people are scared, worried about the pace of change. These are ingredients for dissatisfaction. They manifest themselves

in different ways in different countries. How do you think China sees America now with its tariffs and other actions towards its allies. Is this an opportunity for China? I think Xi Jinping, President Xi, is looking back at the last few months and probably smiling somewhat to himself that he negotiated pretty well and he has done very well out of this situation. I was in Beijing in March. So after President Trump took office for the second time, but before the tariffs were imposed, before Liberation Day. And my very strong sense then was that China was viewing the second Trump administration as an opportunity. In fact, I quit and I think we wrote it in an editorial that they saw it as an opportunity

to make China great again. Firstly, because they were prepared for higher tariffs and had worked out how they would react. Secondly, that any tariff war, any trade war, would prompt them to push domestic consumption and all kinds of economic reforms that they actually already needed to do. And thirdly, because they see America dismantling alliances, America becoming unpredictable, all the things that we've talked about, which if you are an American adversary and an American competitor country, you think it's surely a great thing because America is weakening itself.

And then if you actually look at how the trade war with China panned out, where, you know, both sides raised their tariffs, you know, up to 145% or whatever it was for a while. In the end, it was the US that blinked. The Chinese very effectively weaponized their near monopoly control over rare earths. These are required for everything from electric vehicles to the new technology, the AI revolution. Lots and lots of cutting edge industries are absolutely reliant on rare earths. And so the Chinese had a chokehold. And I think they've used it pretty effectively, and that's why they have ended up with a deal that's not at all bad. It's not a formal deal yet, but it's likely to be one. And I think they see in

President Trump now a president who really wants to do a deal with them. And so I think it is much more of, I would notch it up to effective negotiating on the Chinese side, more than the U.S. And how do other countries see China now? I think countries are wary of China. on where you are in the world, impressed by what it's achieved economically, depending on whether you live in a dictatorship or democracy, you are more or less concerned about its authoritarianism and the way its society is run. And depending on where you are in the world, particularly if you're in East Asia, you were a little worried about what its plans are in your region. And so I think there is a combination of some admiration at all, a lot of disquiet, some fear. It's a mixed

set of emotions, but it is certainly not the kind of emotions that I described at the beginning of our conversation. I don't think anyone thinks of China as a shining city on the hill. We both talked about the new international system that is being born now. How do you think it will be different from the system that we've had in place now for decades? We really don't know what it will be like. And I think anybody who confidently predicts is very, very very hopeful because it's not clear to me that we know. But the elements that are becoming clear is that it is a system where might makes right. It is a system where countries that have power, whether military or economic, are using that power to shape outcomes in a direction they like.

It is one where economic heft is weaponized, whether it's through sanctions, whether it's through tariffs, whether it's through preventing access to critical minerals, all kinds of aspects are being increasingly weaponised. When you no longer have a system where there are rules of the game that people adhere to, it becomes much, much less predictable. And I think it's more of a zero-sum world. It's a world where countries think that, you know, your gain is my loss. And that really didn't used to be the case. We had a multilateral system, which had rules that everybody adhered to and having adhered to them for decades, now we just don't have a system of rules anymore. And I think that will be a much less predictable. And thus, a system that I,

if you call it a system, it's a non-system that will be less conducive to prosperity and, frankly, more dangerous. It certainly seems so. And President Trump's perspective seems very much to be a win-lose zero-sum game perspective. What are the three takeaways you'd like to leave the audience with today? So my first takeaway is that we are in the midst of three shocks, each of which is big enough to be a chapter or two in our grandchildren's history books. The first of those is a geopolitical shock. The post-war world order, the order of alliances and multilateral. institutions is crumbling. The second shock is a shocking economic policy. The prevailing economic policy for decades across the world was a belief in free markets and open markets

and open trade. That has now changed. We're now in a world of intervening governments of might makes right of national champions, where trade is increasingly a bad word and protectionism is in. the third shock as a technology shock, we are in the foothills of the artificial intelligence revolution, which is, I think, going to be bigger than anything we've seen since at least the Industrial Revolution and possibly even bigger than that. And the reason I think we need to think of those three together is that each of those shocks affects the other. The geopolitics, for example, the fragmentation of the old world order makes the world a less trusting and more dangerous and more suspicious place.

And thus, it makes it a more dangerous place for the AI revolution to happen because trust between countries is much lower. My second takeaway, we are introducing the most powerful technology in centuries at a time of political polarization and geostrategic turmoil. And so whether AI is a marvel that helps humanity or a disaster, depends. on how quickly we realize that collectively, across the world, countries need to work together on setting the rules. And then my third takeaway is that whether or not America leads in the 25th century depends on whether it remembers what made it great. And that, I think, is competitive

market, the rule of law, and openness to immigrants, ideas and investments. Those for me are the ingredients that made America great. And if America remembers that, I have no doubt that it will remain the world's preeminent power in the 25th century. I worry if it forgets it. Thank you, Zanny. This has been great. I always enjoyed The Economist. Great. Well, lovely to talk to you. If you're enjoying the podcast, and I really hope you are, please review us on Apple Podcasts or Spotify or wherever you get your podcasts. It really helps get the word out. If you're interested, you can also sign up for the Three Takeaways newsletter at Three Takeaways.com, where you can also listen to previous episodes. You can also follow us on

LinkedIn, X, Instagram, and Facebook. I'm Lynn Toman, and this is Three Takeaways. Thanks for listening.