Shownotes Transcript
We have before us the opportunity to forge for ourselves and for future generations a new world order. This is Multipolarity, charting the rise of the new multipolar world order.
Coming up this week, it's a Shanghai surprise, two audio essays, half a world apart. Nixon went to China first, now Philip Pilkington's there, to see what 50 years of openness to the West has done for the place. Turns out, quite a bit, he'll be sharing his impressions, North Korea-style police state, or Singapore-style authoritarian wonderland.
While Philip's playing tourist, I'll be crossing the Rio Grande and the 49th parallel, taking the temperature on America's deteriorating relations with both Canada and Mexico. After all, collectively, they have the US surrounded. But first, Philip reports, live from the Asian Century.
First thing I'd say about China is that it is not what people think it is. It has become a much more open country. I'm sure it was actually a semi-closed country 10 or 20 years ago. It was never fully closed. My understanding is you could still visit, you could come here on like maybe North Korea or something like that. Although the closure of many of these countries like North Korea is more on the Western side than on the North Korean side.
We have this terrible tendency in the West to shut off travel to other countries and then turn around and say that those countries are hermit kingdoms of some sort. But an awful lot of the time, the restrictions on travel come from the West, not from the countries themselves.
The first thing that stands out about China, there's not that many Westerners here in Beijing, certainly. There are Westerners here. You see tourists in the tourist area, but there's not that many relative to other countries. But the Chinese do seem pretty used to Westerners. There's no sense that we're kind of an alien species or anything like that. I have heard since I've been here that if you travel out to the more rural areas, you will be seen as a bit of a curiosity person.
but not in Beijing. But it is noticeable that there's not that many Westerners here, relative to other places that you travel. I suppose the first thing to say about it is I've put up a few tweets about my trip so far.
and got the inevitable kind of anti-China army into the comments who said "you're only seeing what they want you to see" and so on. Okay well first of all you can pretty much go anywhere in China there's no directions about what you can and you can't do so you can pretty much see anything you can you can go anywhere so
on its face that's kind of a load of rubbish. But more important than that, I don't think the Chinese care what the Westerners see. One of the most striking things about the country when you're here is that it's not for Westerners. The Chinese are proud and nationalist people and they don't really care what Westerners think. If Westerners go away and say that it's a totalitarian
hellhole, I don't think they really care. They say, "Okay, well, don't come to our country then." And then if we say that it's an interesting, quirky place, I think they kind of appreciate it and they say, "Oh yeah, well, we like Europe too," or whatever.
It's all very normal, really. I want to say a few things about getting into the country. I mean, I've never been here before, but from talking to other people, I infer how far things have moved along. I used to travel between Europe and the United States quite a lot. I still do it from time to time, but less so these days. I found entry into China from Europe to be less onerous than post 9-11 US. Very similar in terms of procedure, filling out forms,
you know, talking to the border guard and so on. And also, you know, registering of fingerprints and so on, which, you know, some people, oh, it's a totalitarian, et cetera, et cetera. You have to do this if you enter an American airport as well. So the procedure is effectively the same. But personally, I found the Chinese a little bit more chilled out about it than you're used to in the United States.
The key point here is that the, and it speaks to a lot of things in China, the focus as in America at the checkpoints, at the borders, isn't about freedom or lack of freedom. It's a country that's concerned with security. Now, should it be? Is that an ideal way to live? I don't know, above my pay grade. I'm just saying it's a country focused on security. It's not about restricting your freedoms or whatever. It's just,
you have a harder time at the border than you may at the EU because it's a country that has security concerns, just like the United States after 9-11. Data collection is more extensive than in the EU, but the EU has quite tight restrictions on data collection. But data collection is pretty much equivalent to the United States. Again, really similar to the United States and China in that regard.
Here, I think there are two different motivating factors at play. In China, I get a strong sense that data collection more so tilts towards security concerns. When I was going through Beijing airport, a security guard asked me to take my hat off. I was wearing a baseball cap. Not in a weird way or anything. They just said, can you take your hat off as you walk through the airport? Clearly to collect data, you know.
In the United States, data collection, the extensive data collection network in the United States is more so geared, I think, toward commercial activity.
toward picking up details on people so they can better sell them stuff and market them stuff and so on. Not to say that data collection in the United States isn't also security related. It is. There's a lot of security related data collection. But again, in terms of quantity, in terms of intrusiveness or whatever, I think China's pretty much the same as the United States. The one thing that stands out is they seem to care less about the registration process
or lack of registration of state documents. For example, in the Beijing airport, to log into the Wi-Fi there, you had a few options, you know, Chinese phone number, et cetera. And one of them was you actually upload your passport, you know, your picture of your passport. And usually in the West, you'd only send a picture of a passport to a kind of an official organ, you know, the government or the tax authority or something like that. So they seem a little bit more...
inclined to encourage you to use, I guess, what in the West would be the sensitive documents. Arriving in China, a couple of things I suppose stand out immediately. There are plenty of Western cars here still, but they're all older models. I've been actually trying to keep an eye out for new Western models. So Western cars that are a year old, sparkling out of the factory.
I don't think I've seen a single one. Maybe I've missed one, but I don't think I've seen a single new Western car. Plenty of Western cars around, but they're five-year-old models, 10-year-old models, maybe three-year-old models. It does seem like the automotive market here has reverted to Chinese models, just as the reports say. In terms of the overall kind of feeling of the city, it's a really interesting mix of a...
a highly developed society, a highly developed economy with technologies you'd see here that you just won't see in the West. Perhaps there's equivalents in other parts of Asia and Japan or say Korea or something like that. But I even doubt that. It does feel like in terms of technological uptick, China's at the top.
But at the same time, you can still feel it's a developing country. The traffic has a sort of chaos to it that you wouldn't see in other more developed countries. I don't mean that as a pejorative. I just mean that you get that sense that you can kind of do anything. I mean...
The funny thing about these categorizations that we use in the West is that actually in a culture that has less so-called health and safety checks and where you can drive your moped pretty much anywhere, as far as I can tell, you do in a sense have more freedom. Of course, for that freedom, you're probably sacrificing a little bit of safety, but it's a society with a lot of that sort of freedom. You can kind of
do what you want and not get in trouble for it. It's not a heavily policed society. You'd see probably around the same amount of police as you would in a relatively well-policed
developed world. Police don't seem particularly intrusive. They're the same. The police here are the same as you'd find anywhere. I did notice that a woman was shouting at a man who was getting on a moped. I had seen what was a girlfriend shouting at her boyfriend or something. They're having an argument in the street one morning. And, you know, it wasn't looked upon as some amazing, you know, big security risk or anything like that. Everything seems pretty normal, to be honest.
You definitely get a sense as a tourist that you may be paying the foreign price for things. Again, it's definitely at a street level, not a fully developed economy. And so the pricing system is a little bit up in the air. You pay for everything digitally. I see almost no cash. You can use cash. It's a myth that they've abolished cash. I've seen cash being used, but it seems to be a rarity and you don't see an enormous amount of ATMs around.
Everything seems to be done mainly through Alipay. AliExpress seems to have become the kind of one app to reel them all. I think WeChat can be used, the pay on WeChat, but I haven't been using it. But it's all pretty much digital. And you do get a sense that, you know, when the foreign schmuck walks in, you might get the quote unquote foreign price as you'd experience in many places.
developing economies. I think that's often a hallmark of developing economies. But what is interesting is that everything does seem to be a bargain unless you walk into a kind of, you know, you see some Starbucks here, you see some of the Western brands and you see kind of Chinese equivalents too. And they have kind of set price menus. But even if you go into a shopping mall here, you can kind of haggle with people an awful lot of the time. So it's got a really interesting market square vibe.
to the whole thing. I don't think the Chinese people seem particularly overworked. They're definitely very focused when you see them going about day to day. It's a very focused work-oriented society. There's no doubt about that, but it's not an obsessively work-focused society. You do kind of notice that people integrate their work into their day to day. They kind of hang around in
in parks talking to each other, maybe playing a game of ping pong, I guess, on their work break or something like that. The parks in the city are actually very charming. You see people who probably should be doing their job and they're sitting around smoking two cigarettes or whatever. And you definitely see in the evening that the city really kind of comes alive. People wander around to karaoke bars and music bars. There seems to be quite a developed music scene here.
And it's all very charming. You don't get a sense of kind of the overworked society of children in slave shops, sweatshops or whatever. I remember I was joking with some of my friends, like, haven't seen any suicide nets yet. That whole thing seems pretty alien to what I'm seeing. I see a fairly work-oriented culture that's got a pretty laid-back attitude. To be honest, it's pretty much what you'd see if you go to a Chinatown in the United States, if you've ever visited or visited
a real Chinatown in Europe. That's always kind of hard to explain. There's some Chinatowns in Europe that have been so swamped by Westerners they don't feel like Chinatowns anymore. But if any listeners have actually been to a proper Chinatown that's full of Chinese people with Chinese culture, it's very similar here.
The youth culture seems pretty vibrant. I mentioned before, karaoke seems very popular. That seems to be kind of a pan-Asian thing that doesn't really have much to do with the type of political system you live under. I don't fully understand it, but maybe somebody can explain it to me someday. Music, there does seem to be quite a vibrant music scene here. People playing guitar, singing, stuff like that. Chinese culture is still very prominent in the society. You see people kind of
integrating it into their dress in the evening, not so much during the day. In the evening when they go out, they integrate aspects of Chinese culture into their dress. You just see Chinese culture everywhere. It's been very well preserved. Clearly people kind of live their lives that way, playing music, exercising outside, stuff like that. It doesn't feel like communist oriented or anything like that. It just feels kind of like probably what China's been like
for absolutely years. The impact that Western culture has had is interesting. I don't think it's actually had an enormous impact on the country. You see loads of these kind of, um,
signs on buildings that borrow from Western slogans and stuff. You'll see kind of t-shirts. I think people on the internet often joke about these t-shirts that have kind of poor English on them that either don't mean anything or it's a kind of clumsy sentence. You do see lots of that. But I don't think people are actually interested in the content itself. I went and got a coffee in a coffee shop called James Joyce.
and the interior had absolutely nothing to do with James Joyce. There wasn't any James Joyce pictures. There wasn't any James Joyce books. I don't think there was any books or anything. So they seemed to just borrow these kind of things from the West. I think the way I'd interpret it is very similar to how a Westerner
might try and use Asian script, you know, Chinese script or something, and they'd get a tattoo or they'd put it on the front of their shop or something. The idea isn't so much to actually be that interested in the culture itself, but rather to kind of like symbolize the culture in some way. But Western culture, I just, I don't see an enormous impact. Yes, of course, you go to the music bars and the pop music, while it is Chinese, has
clearly absorbed some aspects of Western pop music. You listen to people kind of play guitar and singing. Obviously, that's kind of imported some aspects of folk and rock and so on. But it doesn't feel like it's that deep. It doesn't feel like South Korean levels is the way I'd put it. I've been trying to get a sense while I'm here of Chinese views of the West, especially in recent times as kind of the trade troubles and so on have come about. I'll talk in a moment about the attitude toward the political shifts in the West
But, you know, just as a general outline of what the place is like, as I said earlier, I don't think Beijingers are particularly interested in Westerners. We're not a curiosity. We're kind of background noise. But there's so few of us, it feels sort of unusual. But they tend to be quite polite and helpful and so on.
The more academic and politically aware people here, who wouldn't be the day-to-day person, I think it's just like in the West, most people are just going about their lives. But, you know, when you meet kind of people at the quote-unquote meeting level, you know, cultural exchange level or whatever you want to call it, academics, people like that, they definitely get the sense that the West has become a very, very confused place.
I don't think that many people in the West understand that, not just because they have probably limited contact with China and with the Chinese, but because the Chinese won't come out and say, wow, the West has become really weird. They're not going to say that to Westerners because they're polite.
But when they meet a Westerner who's aware of the issues in the West, they immediately open up and they're very glad. I get a strong sense that they're very glad that not everyone in the West has gone crazy, to be honest. They are definitely less inclined than what you might call dissident Westerners, people who kind of disagree with the way that the system is going.
Dissident Westerners have a tendency to try and read four-dimensional chess into a lot of the chaos that we've seen in the past five years, especially since the beginning of the Biden administration, perhaps even in the first Trump administration. In the West, we tend to, I'm not saying everybody, but I think there is a tendency to think, oh, well, there must be some ground overarching plan behind all the chaos.
The Chinese aren't as inclined toward that. The Chinese aren't as inclined to try and look at moves that are being made in politics or in culture and see some kind of design behind it. They seem much more comfortable with just recognizing it as chaos. And that's interesting in a lot of different ways. There could be cultural aspects to that. Chinese cultural aspects I don't fully understand, but they're not terribly inclined on forcing a narrative onto something that may not have a great deal of narrative value.
to it. On average, I'd say the understanding of the West, again, I'm talking about the more outward looking, academically oriented people, is very rigorous. I mean, the people who are interested in the West really have studied it and they understand the political systems. They understand it well.
But I think the way that I'd phrase it is they lack a kind of essential grasp of it. They lack the essence of what's really going on. I guess one way to put that is they don't have a great feel for it, but that's kind of misleading. I mean, I'm sure some of them have actually studied in the West and so on. I think it's just that they're looking at it from the outside looking in.
And when you look at something from the outside looking in, you may be able to analyze it quite well. You may even be able to predict quite well. You may even actually have a clearer sense of the overall picture of what's going on, for example, in the West and some of the Western elite who live in their own world. All that is true of the Chinese that I'm talking about.
But I think they don't get that feeling, as it were, that maybe some people who are critical of the West from within the West, the current trajectory of the West, get. And I think they're very refreshed when they're encountered with that
I think that's probably in part driven by the fact that, of course, the way for them to follow what's going on in the West is to follow the Western media. But the Western media has become a kind of self-enclosed propagandistic talking shop to a large extent.
Of course, what happens is kind of these academic circles is that they'll read the garbage media, you know, the talking points, the narrative spin, all this rubbish that's completely engulfed the Western media sphere. And then they'll reflect that back to the West anytime they meet Westerners, which reinforces the cycle. Although they are more attuned to the fact that a lot of this stuff isn't real and they try and get a critical grasp on it, as I said.
They're very confused about some aspects of governance in the West. I mean, the one that stands out most is the European Union. I don't think the Chinese fully really get why the West, the European countries decided to form the EU because they see sovereignty and clear decision making, you know, clear decision making with a clear decision maker as being key to good governance, which is true, actually.
And they say, well, why would you give up your sovereignty to a body that has a very poor track record and hard time making decisions? When asked this, I don't have a very good answer. I have to lapse into some sort of historical context.
Apart from Central and Eastern Europe and especially Hungary, the Chinese have taken note of Hungary and they've taken note of the developments in other parts of Central and Eastern Europe. Europe is pretty generally viewed as chaotic and actually pretty dangerous. And not all of this is from kind of like online doom posting on Twitter. I mean, a lot of Chinese people don't spend a great deal of time on Twitter.
It's actually from personal experience. Most of the kind of outward looking people who are interested in the West, academically focused and so on, have been to Western cities. And they've either had poor experiences with crime, frankly, because China's very safe, or they know someone who's had poor experiences with crime. It's very sad that that view of Europe has been spread all over a major power like China. And it does feel like our decision makers and policymakers actually aren't aware of that.
America is basically viewed at the moment as having built a bunch of global institutions that worked in their favor when they were built. But now that these globalized institutions aren't clearly working in their favor, they've turned against these institutions. And I think the Chinese understand that. I don't think they're confused by that. It's natural in a sense.
But I think they view it as being a bit weak-sourced. I think they don't have a great deal of respect for that, would be the way that I'd put it. The trade war is seen as extremely annoying. And I do get the sense the Chinese want a good relationship with the West. Beyond just trade or anything, I think they just want a good relationship with the West.
But they don't view the trade war as an existential matter. Western views of the trade war that you read about in the newspapers, even the proponents of it, like the Trump administration, the way they communicate it is that, you know, we need to save us or it'll destroy us. And Chinese don't really view it in that way at all. My sense is they're more concerned with trying to maintain some decent relationship with the West.
In terms of politics here, there's definitely a young-old divide. The younger people tend to be Xi-era nationalists, and the older people tend to be kind of Deng-era globalization people. Now, there's a lot of overlap between those things. The nationalists aren't anti-free trade and so on. But there is a difference in tone. You could almost do a whole episode about it, but I'll just mention it here as part of a kind of a broad overview.
Both groups, however, share a lot in common. They both understand that the key is not just to build prosperity in their country, but actually create a good society, which is good for people, which is orderly, etc., etc. They don't have this GDP obsession whatsoever.
that the West has. And I think often when Westerners, especially Westerners critical of China, look at China and they complain about a missed GDP target and everything like that, I don't think they see that the GDP targets are very important. The economy is very important for the Chinese government, but it's not the only thing. It's not the only measure or metric that they're targeting at. Driving around, I noticed...
to my chagrin, that the European embassies are covered, at least the ones I saw, are covered in Ukrainian flags. And I think I saw the Swedish embassy even had a pride flag on it.
I think these people are comically unaware of how they're being viewed in the country. It reminded me actually of a late communist regime like Cuba, kind of proudly holding onto its symbolism, but everyone knows it's in terminal decline. The Chinese don't care about the Ukraine flags or the pride flags or anything else, but they
You know, it's just, it's like a flag on a mast of a sinking ship. That's how it feels. They know, the Chinese know that it's a snub. They know that. I mean, it's clear. The Europeans have said over and over again that China's terrible for backing the Russians in the Ukraine war. So then flying a Ukraine flag on your embassy in China is sending a very clear message. But
I think it's just viewed with pity, rather than anything else. The ambassadors themselves must be completely trapped in their own information cycle. I guess they don't properly interact with the locals here, or at least they don't have honest conversations with them. It's the only thing that I can take away from that. I did not see the United States embassy, but I'm guessing there is no funny flags on the United States embassy in the Trump administration.
Chinese themselves, they're confident in their position in the trade war, as I said, and they're pretty curious to see where the MAGA movement goes next.
I think they've accepted that it's a pretty permanent fixture. They're open to that changing, but I think they've accepted that it's a pretty permanent fixture. I don't think that they're fatalistic about it. I think that they view America as making a series of mistakes right now, but they're hopeful that relations will eventually get back on track. And that was quite surprising for me. I thought maybe the monster tariffs of Liberation Day might have finally alienated the Chinese, but I don't get that sense from talking to people
The Chinese are just baffled at what's happening in Europe. They can make sense of America. They can make sense of the strategy. Even if they think the strategy is bad, they can see, okay, you lost your manufacturing and you lost it according to your own rules. That's the way they'd say it. But we get it. It hurts and you want it back, whatever. Europe, they just don't understand. And it's almost a topic of embarrassment to bring up in discussion and trying to explain it. I mean, people understand if you explain it to them and
But, you know, the whole thing is kind of grim, really. Again, they want Europe to get back on track. They'd like to reestablish relations and so on. But they never knew who to call in Europe. And now the sense is just that, you know, the place is in complete chaos. And the last thing I'll discuss is issues in the financial markets after Liberation Day, decline of the dollar and so on.
I don't think they're clearly aware, as maybe a listener of Multipolarity might be, of the nature and scale of the changes that we're experiencing right now in the US dollar and so on. But they are aware of it all the same. And when you bring up the topic, they're pretty informed, aware, etc., etc., etc.
And I think it's a topic of discussion that needs to be broached between the Chinese and the Americans. I think that's ultimately the issue here. The Americans and the Chinese need to sit down and they need to talk about this. I think the Chinese are very open to talking about this. When you say to them, you know, this system was unsustainable, of course, you benefited from it. Of course, the tariffs won't work. And of course,
If the system changes chaotically, you will lose less than America. But they are still interested in stability, and I think they're willing to talk about it. So really what I've taken away from the trip in terms of current global affairs is that there needs to be a conference between these two countries. They need to sit down at the table and realistically discuss this issue around the global monetary system.
They need to discuss the fact that the tariffs and the sanctions on Russian reserves and so on may have set off a chain of events in motion that nobody now controls. And that if we don't get some handle on it and try and put together some sort of a negotiated solution to global monetary problems, that we might end up with chaos. So I'd say overall, I leave on a relatively optimistic note. I don't think the Chinese are completely closed for business. I don't think the tariffs have completely alienated them.
And I do think they're open to new solutions. But right now, I think they view the West in much the same way as multipolarity views the West as being in a bit of a mess. And a lot of the issues are of the West's own making. So hopefully moving forward, relations can get better. And I'd certainly heartily recommend any listeners of multipolarity who haven't visited China to come and see it. It's a very impressive country. And it's not what the propaganda would have you believe. Thank you.
Thank you, and hopefully I'll be back next week when I'm outside the firewall. Did anybody notice recently that it looks as though the US is going to tax remittances, remittance payments, leaving the US for other countries at 5%? Did anybody think that this might be a bigger issue than it seemed, that it could have geopolitical implications?
ramifications? Well, you should have because I think it does. The problem at the moment, of course, is that the world is not talking about anything other than tariffs and US trade policy and perhaps negotiations in Istanbul. So can multipolarity as a podcast suggest that at least some
American geopolitical commentators and thinkers shift their attention a little bit closer to home. We've spoken before about Mexico on Multipolarity the podcast and about how important it is for the US to keep good relations with Mexico from a geopolitical perspective and how relations have actually been deteriorating for years over a series of apparently quite small matters.
But now I think it's time for multipolarity to climb back on its horse and find a place to move across the Rio Grande. Look, apart from awful John Wayne impressions, I think this story starts with the election of Andres Manuel Lopez Obrador, also and much easier known as AMLO, in 2018.
He undertook a very typical left-wing Latin American economics program, including things like increasing the minimum wage and welfare payments, but also labor reforms. And this actually had pretty big effects on poverty and inequality, and the economy didn't collapse. So it all made him hugely popular. Actually, I think I'm right in saying that as many as nine and a half million Mexicans were lifted from poverty
during AMLO's six-year term. So it's not easy to, it's not difficult, I should say, to understand why he was very popular and why his successor, Claudia Scheinbaum, was elected with a landslide last year. But what his program also did was it made him unpopular with certain very powerful interest groups within the U.S. Now, I don't want to go into the details of those disputes there, here,
And those listeners who are interested or are interested after hearing this and the way I think it's going should look up the work that Conor Gallagher and Nick Corbishley have done for NakedCapitalism.com. And they've really covered this entire story in a lot of detail and have examined some of the individual points of conflict between Mexico and the US with a lot of detail. So look into that. But just to give you an overview.
I think the first point of conflict at the moment has been in relation to the changes that AMLO made to regulation and commerce-related legislation. For example, before he was elected, Mexico had one of the friendliest regulatory and legal systems for international miners in the world.
So if you were a miner who wanted to come to Mexico and dig up metals or minerals or whatever, you would have a great environment in which to do that. But AMLO passed laws that would protect local communities affected by mining operations, take into account the potential damage to the local environment, give the Mexican government greater control over land use and control over the mining companies operating in the country.
And it would also take a greater share of the value produced by Mexico's underground resources. So it's not difficult to see why that would be wildly popular within Mexico itself, but not so popular among these metals and mining conglomerates that were operating there, many of which were Canadian and American.
Food companies, big food, American companies also had their noses put out of joint a little bit when the Mexicans sought to take on the obesity crisis by banning soft drinks and junk food in certain places. That raised the ire of the usual suspects there. Now, the second point of conflict was GM Crops.
Mexico wanted to protect its heritage corn varieties from GN crops, which American big agriculture companies wanted to plant. And the US big agri actually took Mexico to court based on USMCA rules, USMCA being the successor for NAFTA. The third and final point was the judiciary in Mexico. Obviously, the judiciary in Mexico is notoriously corrupt. And what AMLO suggested and what he put in place was a system where that
Judges now at every single level would have to seek election, whether it be by local citizens or nationally for their positions. Now his argument was that it would actually remove their impunity, it would make them responsive to
the people for their decisions. But critics, including many in the US, said that it would remove the independence of the judiciary altogether, and it would remove some of the safeguards that an independent judiciary provides a free and liberal society. So those are the three main areas of conflict between the US and Mexico. But there've also been, of course, other points of friction regarding immigration, especially in Donald Trump's first term and second term.
And also during the Biden years, Mexico's neutral stance on the war in Ukraine was a point of conflict as well. And obviously since then, Donald Trump's trade policies, where he's increased the tariffs on Mexico and Canada,
haven't helped relations at all so now we see coming into all of this the story that remissions are likely going to be taxed at five percent now five percent might not sound a lot okay if you send 300 quid it's 15 dollars does that really sound like a whole amount but mexico receives get this 64 billion dollars in remittances every year
which is a lot more than the UK spends on defense. It's probably about 10%, 15% more than the UK spends on the entirety of its defense budget. So this is a big amount. And almost all of that comes from the US, as one can imagine. And so it's estimated that like a remittance tax of 5% from the US would give Mexico a $3.25 billion hit every year.
And it would knock about 0.2% of its annual GDP. And you can imagine over a 10-year period, that starts to count in terms of the size of the Mexican economy and count big style. So this is just another point at which US-Mexican relations are really getting worse and worse. But the really big one
The really big one, I think, is that there's a real possibility now that the US will take military action against Mexico. That is, the US could go to war in Mexico against the drug cartels. It could fight a counter-terrorist style war in Mexico against the drug cartels. Now, I think it's fair to say that, look, the effect of drugs such as fentanyl, but also others as well,
in the US is as well known as it's horrific. Nobody can see the effect that these narcotics have and not be affected and not imagine that the US would want to do everything to stop them having such an effect. And it's also fair to say that many of these are either produced or transported into the US by these hugely powerful Mexican drug cartels.
So on his first day in office, President Trump signed an innocuous sounding executive order called 14157. And that designated several drug gangs and cartels as foreign terrorist organizations and specially designated global terrorists. Now those designations illegally allow the U.S. military to
to conduct special operations against those groups, treating them as terrorist threats to the US rather than criminals.
And Pete Hegseth, who is the Secretary of Defense, said when that executive order was signed that all options were on the table, including strikes on Mexico. So I guess that would mean missiles, drones, and special operations, special forces operations against Mexico itself. Now in March this year, Congress adopted a resolution on terrorism.
the Authorization of Use of Military Force Against the Mexican Drug Cartels. So it's the AUMF against Mexican drug cartels. And it was actually a resolution that was modeled on the AUMF, the Authorization of Use of Military Force, that was passed in 2001 with regard to the war on terror in Al-Qaeda and the 9-11 attacks.
It's also been reported more recently that the CIA has been reviewing all of the legal authorizations to see what it is and what it's not entitled to do with regard to the Mexican cartels now. But Mexico, as you can imagine, is not responding particularly well to this. It doesn't want another war on terror, but on Mexican territory. It probably looks at Afghanistan and Iraq, countries in East Africa and in Libya,
and probably thinks that this doesn't seem like a very good idea. Now, AMLO, when he was in power, reaffirmed Mexican sovereignty on such matters, like on such security matters. He affirmed that it was Mexico that had the responsibility and Mexico that was the sovereign responsible for dealing with such issues, not the US or any other foreign actor. And the legislature around the same time passed laws
laws to limit actions of foreign states on Mexican soil and foreign organizations. And that would include organizations like the U.S. Drug Enforcement Agency, the DEA, which we've all seen on American movies, for example, and American TV programs. Now, it seems that President Claudia Scheinbaum is taking exactly the same position as AMLO. She is reaffirming that position.
And publicly, she said that she will not authorize drone or special forces strikes on the cartels on Mexican soil. And, you know, I think she also quite reasonably points out that the U.S. should seek to do its part in dealing with the problem by addressing the drug side of the trade rather than focusing on supply. It's a bit like arresting all the prostitutes without touching the Johns who are cruising up and down the street looking for drugs.
women to pay for sex. I know that sounds like a crude analogy, but you've got to address both the demand and the supply side of such illegal trades when it comes to vices.
So I think we need to take a step back here. I think this is quite important. Let's really look at the big picture here. What makes the U.S. so powerful? Like, why is the U.S. such a powerful nation? Now, to be sure, a lot of it has to do with the size and the depth and the breadth of its economy. Like, its economy isn't just massive enough to pay for a huge military.
But it also produces a full stack of raw materials and industry and high tech and top rate human resources and intellectual resources as well. It's a really unique combination of size and depth and breadth.
But the other thing that makes it so powerful, famously, I would say these days, now that everybody's into John Mearsheimer and the idea of realism and geopolitics, is that geographic location. It's protected by an impassable ocean to the east, an impassable ocean to the west. And the north and south, it has far smaller, quite pacific nations.
So it doesn't really have to worry in the same way that, say, Russia does because it's flanked by big regional powers like Germany and Turkey and China who have
been able to produce like serious militaries in the past or Germany's problem, for example, being sandwiched between France and Russia. The US is unique in that it doesn't have to deal with such issues. Even China, as large and powerful as it is, it has a country like Japan sitting right off its coast. And it has countries like Vietnam with its defensive impregnability, it seems, if you look at history, or even the Philippines is a populist nation, right? Like
The US doesn't really have to deal with anything like that. And here's the thing. Navies are expensive. Expeditionary forces are expensive. Like a navy and an expeditionary force is way more expensive than
than an army. And building and maintaining ships and training and maintaining the crews that can operate them effectively is extremely expensive. Now, if the US had to maintain a large standing army to protect against other great powers in its neighborhood, it might not be able to afford quite such a powerful navy.
It certainly wouldn't be able to thrust its kind of energies outward in the way that it does today if there were threats to pay attention to in its own backyard. It just wouldn't be able to do that. Maybe it's just a notable coincidence, but note that as a Briton, I know the Royal Navy's ascent
to global supremacy happened only after the union between England and Scotland. And that gave Westminster control over the entire island of Britain. We didn't have to worry about the Scots working with the French anymore. And after that, the Royal Navy developed into the most powerful navy in the world. And from the early 19th century until the early 20th century, it was the preeminent military force in the world.
What I'm trying to say here is that while at the moment the kind of timorousness and the relative weakness of Mexico and Canada is a huge geopolitical advantage to the US, it must maintain good relations with those countries in order to maintain that huge geopolitical advantage. But
The opposite is obviously happening. Already we've seen how relations are strained with the Canadians. Canada is so loosely connected as a nation that it presents an open goal for any American deep state mastermind looking to get what they want from Canada.
And if you want to understand more about that, you should go back a couple of episodes and find the Multipolarity, the podcast episode in which we discussed all of that. And I think we provided quite unique and very detailed analysis of why that is. But I would say that a counterterrorism war with Mexico is bound to sour relations and in a really serious and
potentially irreparable in the medium term way. About a year or so ago, I got really interested in this podcast called The Connect with Joni Mitchell. It seems to be very popular. And I watched several of the episodes, often they're very entertaining examinations of the drug industry in America and Mexico.
And in one episode, he visited Culiacan, which is the headquarters of the Sinaloa Cartel, which is perhaps the most powerful in Mexico. And what this Johnny Mitchell character described in his visit wasn't so much a city in which a cartel was headquartered, but a cartel that had an own that ran a whole city and a whole region, in fact.
In this episode, it was described essentially that the cartel was almost a government within the government. They had a surveillance operation that was sophisticated enough to follow him from the airport as a recognized journalist. He launched a drone to take some stock footage of the city and it was knocked out of the sky by electronic interference. They were able to tap his phone calls.
They provided the police or they paid the police, all of them, as far as I can tell. And I could say that taking on such a cartel is not going to be easy. It's going to run into exactly the same problems as all of the other counterterrorism, counterinsurgency operations since 2001 and in the British experience during the troubles in Northern Ireland have run into.
First, it's going to create anti-American sentiment in general across Mexico. Second, there's bound to be collateral damage. There's bound to be people who are killed who shouldn't have been, property that's destroyed that shouldn't have been. That's going to upset people. That's going to cause serious issues as things go on. And thirdly, even those cartel members who are killed, somebody's son or brother or father, okay, and that creates a desire for vengeance, right?
And in addition to that, you also have, if this cartel really is as integral to the governance of the city as Johnny Mitchell described, then you're going to run into the problem that the population is going to be supporting that cartel over you, this outside, this foreign country that's coming to take them down, right? It's going to be a serious problem if the US actually goes ahead and does this.
Look, this is a classic case in which both sides would probably be right. The US is absolutely within its rights to say we cannot tolerate a narco state or a state that is facilitating the transportation of all of these drugs into our territory. Like, we can't tolerate that on our borders. If you're not going to do something about it, if you're not going to get this under control, we're going to have to. That is a perfectly reasonable position to take.
Equally, it's perfectly reasonable for the Mexicans to say, "This is our country. We're the government of this country. We were elected by the Mexican people. We are the sovereigns of this area of land. We decide whether you come in or not." But this is how most wars, like most wars don't have a cut and dry right and wrong. This is a lie that we're sold.
in the press in order to justify our support for one side or the other. Almost every war, with the exception of perhaps the Second World War, has a relatively reasonable case that can be made on either side. I would say here, though, that from the American point of view, Mexico also has some cards to play here. The first thing I would say is there are significant Hispanic and Mexican minorities in almost every state.
But especially in the southern US state, I mean, almost half of the population of New Mexico is Hispanic. In Texas and California, it's almost 40%. In Arizona and Nevada, it's about a third, about 30%. In Colorado, it's about one in five residents are Hispanic. Now, in each of those states, the majority of the Hispanic population
as Mexican-American, and that's census data, the official numbers. I think it's reasonable to say that the real numbers are likely to be quite significantly higher than that. And you'll probably note that all of those states that I mentioned there were the states that used to be part of Mexico itself before the U.S. annexed them in 1848. It actually took in 1848 about half of Mexican territory.
And surely that's a point that any Mexican government, any Mexican politician that wanted to whip up nationalist or anti-American feeling, including perhaps within the borders of the US itself, could easily refer to like 1848 and all of that. The cartels themselves are a potential tool to be used. I mean, they operate within the United States, don't they? Powerfully so as well.
So if the US could fund and support nationalist Ukrainians, and sometimes even just football hooligan groups, to take the fight to the Russians in the Donbass, or the breakaway Donbass Republics in inverted commas,
between 2014 and 2022, what could be done with the cartels by a government in Mexico City minded to do so, right? I mean, these are real cards that could be played. I mean, if we're talking about Ukraine, by the way, I should mention here, I've looked into this before, and I believe I'm right in saying that the Mexican economy is as large in relation to the US economy as Ukraine's is
to the Russian economy or Ukraine's wars to the Russian economy in 2021. So I think that Washington really must tread carefully here. Of course, it's got a point with regard to the drugs. Of course, it's perfectly within its rights to set its own trade policy. It's perfectly in its rights to look after its economic interest as it sees them.
irrespective of how it might affect other countries. But it does affect other countries, and this is very important. Now, at the moment, I think, you know, the U.S. is like an awesomely powerful country. It shouldn't be underestimated, despite its political turmoil and despite some of the military turnarounds it suffered in the war on terror. We shouldn't forget how awesomely powerful the U.S. is.
And I think because of that, it's likely to get its way with Mexico. It's likely to get its way with Canada. It's likely also to be able to smooth over some of these differences. But it is building up problems for the future when perhaps the US might be weaker or Mexico might be stronger in relative terms than it is at present.
And I think that a war, even if it was limited to drone strikes or special forces operations, would be an entirely different matter. That would really mean a serious and long-term decline in relations between Washington and Mexico City. It would be a serious problem.
I think that everybody at the moment geopolitically in the United States is focused on whether it ought to disentangle itself from Europe and the Middle East to concentrate on China, or whether it can still afford to support allies like Israel and like Ukraine in their fight against regional rivals and at the same time control China.
China. Can it walk and chew gum at the same time? Or should it really focus on walking? That's like the big question. It's time, I think, though, for somebody, at least some people in the US, to dust off the Monroe Doctrine and think about how it would apply in the 21st century.
and how the US could manage relations in its backyard much more carefully than it has been because it's not being careful at all and over time, given enough time, that'll cause big problems in the future.