Life on Planet Donald 2. Market Share Over Marxism. Lessons From Ancient Empires. Plus Putting Percentages on Plans – and more! #238
Happy new fear!
Grüezi!
🌍 POWER PLAYS & MICROCHIPS: Your 2025 Global Order Survival Guide
Where Trump meets TSMC, and ancient empires have a warning for us all
Here’s your essential briefing on how the global chessboard is being reshaped:
Mind the Probability Gap: Trump’s potential return isn’t triggering panic in Beijing—quite the opposite.
China’s Stealthy Economic Strategy: Despite possessing an arsenal of economic weapons, Beijing is playing the long game.
The TSMC Factor: Meet Morris Chang, the man who accidentally became kingmaker in the US-China tech rivalry.
Failing to Byzantium: Today’s great power competition has an uncomfortable historical parallel – the US and China risk exhausting themselves through competition whilst missing emerging threats.
Trading with Frenemies: The World Bank’s latest research suggests rivals can maintain trade relationships—if they put economic benefits over rivalry.
The Numbers Game: When assessing global risks, beware the probability trap. The difference between “fair chance” and “30% probability” isn’t just semantic—it can change history.
1️⃣ The Trump 2.0 World Order
Putting percentages on Planet Donald.
The FT’s Gideon Rachman has come up with 5 possible scenarios for America’s next president. But what about their probabilities using super-forecasting techniques? Here’s my analysis:
(35%) Globalisation without America – the US retreats behind tariff walls whilst the rest of the world accelerates economic interdependence through new trade deals and partnerships.
Why? It’s already happening. The EU is forging ahead with new trade agreements, the BRICS are expanding, and countries have learned to work around the US’s absence from key frameworks. The dollar’s dominance may wane, but it won’t collapse.
(28%) Anarchy in a Leaderless World – Not outright chaos, but a steady erosion of international cooperation. Think more failed states, regional conflicts, and populist surges as the post-WW2 order fragments.
This doesn’t require dramatic changes – just a continuation of current trends. Regional powers fill vacuums, the UN becomes increasingly toothless, and migration pressures intensify.
(15%) New Great Power Bargain – Trump strikes deals with Putin and Xi, essentially carving up spheres of influence. Think a modern-day Yalta Conference.
Whilst this plays to Trump’s ‘dealmaker’ persona and admiration for autocrats, it faces massive institutional resistance within the US and practical difficulties in implementation.
(13%) Accidental War – Not planned aggression, but miscalculation in an increasingly unstable world. Think 1914, but with nukes. The saving grace? Economic interdependence and remaining diplomatic channels.
(9%) America First Succeeds! – Trump’s bet on American power pays off, forcing allies to spend more on defence whilst US tech/financial dominance grows. Just requires multiple pieces to fall perfectly into place.
The most likely scenarios aren’t the most dramatic ones. They’re the ones that require the least deviation from current trends and fewer coordinated changes from multiple actors.
These aren’t mutually exclusive. Reality will be a messy hybrid, with elements of several scenarios playing out simultaneously in different regions and sectors.
The biggest wild card? How other powers – especially China and Russia – react to Trump’s moves. Their responses could dramatically shift probabilities.
We’re likely heading for a more fragmented, less US-centric world order. But it’s likely to happen through gradual erosion rather than dramatic rupture. The “interesting times” ahead might be more chronic than acute.
2️⃣ Why China Doesn’t Fear Trump 2.0
Market share over Marxism.
Beijing’s reaction to Trump’s return is not what you’d expect. Despite his promises of 60% tariffs and tough talk, China’s leadership has concluded that Trump’s isolationism may actually help their cause.
His scepticism of alliances and multilateral institutions creates openings for Beijing to strengthen ties with traditional US partners.
When Trump questions NATO’s relevance or demands more payments from Asian allies, he inadvertently encourages them to hedge their bets.
The evidence? European leaders are actively pursuing their own China strategies, with Macron’s early outreach to Trump aimed at asserting European autonomy. Japan and South Korea are quietly deepening economic ties with Beijing even as they keep their security relationships with Washington.
China’s dialled back the “wolf warrior” bravado. Rather than matching Trump’s aggressive rhetoric, Beijing has been talking “mutual respect” and “peaceful coexistence”.
This isn’t weakness – it’s calculation. Chinese leaders understand that aggressive moves risk accelerating the economic decoupling they’re hoping to avoid.
Most importantly, this won’t be a traditional ideological conflict. Trump’s transactional approach and Beijing’s focus on economic rather than political influence means both sides are more about market share than morality or Marxism.
The result? Intense but contained competition, rather than Cold War-style confrontation.
The real contest will be over technology and market access, not military supremacy or political systems.
3️⃣ China’s Economic Six-Shooter Stays Holstered
Why Beijing will play it cool
China has an arsenal of economic weapons that could hurt the US – from dominating critical mineral supplies to restricting access to its massive market. But Beijing’s response to growing US pressure has been remarkably restrained. Understanding why reveals much about the changing nature of economic power.
Despite controlling 90% of semiconductor supply to Russia’s military and 70% of its machine tools, China hasn’t weaponised its advantages. When faced with US semiconductor restrictions, Beijing’s response has focused on targeted companies rather than broader retaliation.
The logic behind this restraint? China’s exports to Saudi Arabia hit $40.2bn in the first ten months of 2024, with a third of its $21.6bn greenfield investments focusing on clean technology. These new partnerships would be jeopardised by aggressive economic warfare.
The real vulnerability lies in China’s export dependency. As the world’s factory, China needs Western consumers.
The country’s transition toward green technology and high-value manufacturing makes maintaining market access even more crucial.
China’s dominance in critical minerals relies on supplying global markets at low, low prices. Export controls would make alternative sources economical – Canada already supplies more gallium to the US than China does. And punishing US companies in China might feel satisfying but would only accelerate an exodus to other markets.
Beyond specific sectors, Beijing’s restraint reflects a deeper strategy. Rather than confrontation, China is building new financial architecture through cross-listed ETFs, banking agreements, and sovereign bond issuance.
90% of Russia-China trade now occurs in local currencies, while new payment systems like Project mBridge connect Asian financial hubs.
This step-by-step approach aims at gradually increasing Chinese influence without triggering a US backlash.
4️⃣ Trading With The Enemy
The new rules of global commerce
The biggest question facing the global economy in 2025 isn’t whether rivals can trade – it’s how to keep commerce whilst locked in geopolitical competition.
New research from the World Bank says countries can maintain meaningful trade even during intense rivalry, so long as they put their own economic welfare ahead of harming the competition.
This explains why US-China trade continues despite political tensions.
But here’s the rub. Current global trade rules were designed for friends, not frenemies. The WTO system assumes goodwill and mutual interest in maintaining open markets. When rivalry intensifies, these assumptions break down.
The US-China Phase 1 deal worked precisely because it broke traditional trade rules.
Evidence suggests we’re entering a new era of ‘managed’ trade. Countries maintain trade in non-strategic sectors whilst carefully managing exchanges in sensitive areas like technology and critical resources. This isn’t the free trade ideal of the 1990s, but it’s not pure mercantilism either.
The challenge is developing rules flexible enough to handle rivalry without destroying the benefits of trade.
The implications extend far beyond US-China relations. As more countries face the friend-or-foe dilemma, the global trading system needs new ways to manage commercial relationships between strategic competitors.
5️⃣ The Byzantine Warning
Ancient parallels for modern powers
The Byzantine-Persian Wars offer a chilling parallel for today’s great power competition. Like the US and China today, these two empires saw themselves as universal civilisations with competing models of order.
Both poured astronomical resources into competition – massive fortifications, spy networks, proxy wars through client states. The cost was devastating: Persian shah Khosrau II so overtaxed his people it sparked internal revolts, while Rome’s eastern Emperor Heraclius melted down church treasures to fund his armies.
Today’s powers show eerily similar strains. The US pours nearly $900B into military spending while life expectancy drops. China faces youth unemployment and property crises while funding ambitious tech initiatives. Both struggle with inequality and demographic decline.
The end came with shocking speed. By the 630s, both empires were shells of themselves – just as Arab armies emerged as a new force. While they obsessed over each other, they missed bigger threats.
Will the US and China learn from history? Unlike Rome and Persia, they have deep economic ties. The challenge will be managing competition without creating conditions for mutual decline, or an unexpected new entrant.
6️⃣ The Hidden Story Behind the World’s Most Important Company
Meet Mr Chips…
When Morris Chang (above) founded Taiwan Semiconductor Manufacturing Company (TSMC) in 1987, few could have predicted it would become the linchpin of global tech.
Today, TSMC produces 90% of the world’s most advanced semiconductors, making it arguably more crucial to modern life than any Silicon Valley giant.
Chang’s journey to creating TSMC reveals much about technological innovation, geopolitical change and personal doggedness.
After being passed over at Texas Instruments and struggling through multiple exec roles, he developed a “big idea” – separating chip design from manufacturing to transform the semiconductor industry.
This “pure play foundry” model meant companies could design chips without building costly fabrication plants.
TSMC now produces more than 3 million wafers a year for Apple, Nvidia, and virtually every other major tech company. In its first decade, revenue grew at 49% annually.
The implications for global power are immense. TSMC’s dominance means neither the US nor China can achieve technological supremacy without access to its manufacturing capabilities.
As we start 2025, TSMC’s story illuminates the changing nature of global power. In a world where technological capability matters more than military might, a semiconductor manufacturer in Taiwan has become one of the most geopolitically significant companies in history.
7️⃣ The Probability Trap
When words hide numbers
How did the Bay of Pigs disaster happen? It began with a probability: a 30% chance of success had become “a fair chance” by the time reports reached Kennedy. This linguistic sleight-of-hand changed history.
Intelligence agencies learned from the mistake.
Today, they have strict guidelines. “Likely” must mean 55-75% probability. Why? Because words like “fair chance” or “possible” mean different things to different people.
That’s what lurked behind the percentages in the first story.
But even if perfectly objective probability doesn’t exist, acting as if it does leads to better decision-making.
Weather forecasts, clinical trials, intelligence assessments – they all use probability. But their accuracy depends on understanding the mathematics and the human psychology of uncertainty.
The lesson? Probability is a tool, not a truth. Use numbers, when possible, but remember they’re based on judgments. And always be clear about uncertainty – lives can depend on it.
Want more clear-eyed analysis of global trends shaping 2025? Follow for weekly insights that cut through merchants of doom and hopium dealers.
Thanks for reading!
Adrian
Links
How America First will transform the world in 2025
Geopolitics and the World Trading System
Why probability probably doesn’t exist (but it is useful to act like it does)
Behaviour-based dependency networks between places shape urban economic resilience
How China can achieve its next wave of economic growth