Yeah,

it's not in the price.

And that's where the signal versus noise construct as market participants are used to thinking about developments.

It just doesn't really work when it comes to geopolitics.

Take the big example of the full-scale Russian invasion of Ukraine.

When I was in my role at Citi writing investment research, I talked about the Russia-Georgia war in 2008.

I talked about the annexation of Crimea, which I was told by a lot of investors was a tempest in a teapot.

I'm not asking you to make actual predictions, but when you talk about these plausible hypotheticals, what are some of the things that are on your radar screen that maybe other people haven't considered quite as much and maybe should be thinking about?

What kind of mindset should, should leaders take when, when thinking about the war? Co- corporate leaders.

So this impacts costs and, and that's the, the most obvious one.

I mean, I was one of the few, you know, analysts from the beginning saying this war would not be over quickly, uh, which is what the market was priced for.

It would not be like June 2025, which was a, a week of attacks.

High oil prices stay with us.

Yes, you know, as the Treasury Secretary said- Alternatives to the Strait of Hormuz will be found.

That's not really the most important part.

Yeah

What advice would you give to someone running a big listed company or who's an entrepreneur or someone who works in manufacturing of what you can actually do to safeguard yourself against massive, multipolar events happening on either side of the UK?

Well, I mean, obviously, that's why I run an advisory business, because it's not a short answer.

But the first and most important point is to broaden your view of the context that we're operating in.

And that's already happening.

It used to be people that had a domestic business that didn't do much trade abroad felt somewhat insulated.

That's not the case anymore, because whether it's the security of shipping lanes, supply chains, the income of the median voter, all of these forces are now more subject to global change than at least we thought they would be.

And then there's the wild card of AI, which I think has really accelerated anxiety.

Take us inside the room and that what you think might be going on in the Treasury right now when they consider the outside geopolitical forces that are going to sort of buffet around this budget?

Do you have any view of how this might play out?

Uh, I mean, this is a classic textbook escalation trap, right? And, um, you know that I've been consistent about this from the beginning, whereby the war aims weren't clear, the strength of the adversary in the case of Iran was underestimated, um, the, with the, uh, new, uh, leverage that Iran has with the Strait of Hormuz- Going back to the original, uh, objective, which was mainly around depriving Iran of, of nuclear weapons capability, has now moved further down the list.

Yeah

... line the streets i- in a sign of respect.

And it's a puzzle really, isn't it? I mean, the US casualties currently are around 18.

Um, you know, my, my father was a war orphan in World War II to, to...

I know how these are all tragedies, and yet are we inured to the, the human costs of war? The economic costs of war? There is some pretty significant cognitive dissonance going on.

But to bring it back to the markets, in a way the markets are letting it happen by, you know, by not reacting, um, if you like.

Mm.

China and everything else.

Um, but how deep does that relationship go? How long can it last between leaders? This is one issue with democracies.

You know, eventually people leave.

I think the other thing that this deal, um, highlights for us is the, uh, intensified interest in clean energy, and I think it is really important to differentiate between nuclear energy and nuclear weapons.

Um, the war in, in Iran and indeed the war between Russia and Ukraine also have just highlighted dependence upon fossil fuels.

Uh, I've been saying that, that nuclear power would take off for a long time.

the trivial.

Can you explain this concept? What does it mean and why is it happening now?

Well, our geopolitics super cycle framework is based on empirical research that we conducted that looked at the period between 2010, the tail end of the global financial crisis, through the end of 2024.

So a 15 year period, we actually constructed a database.

And this is always a challenge when you're looking at geopolitics.

We have always a measurement issue.

During that period, what we found was that geopolitical shock events tripled.

In other words, in the period before Trump 2.0. And so the geopolitics super cycle took off quite a long time ago, arguably in the aftermath of the global financial crisis.

But in terms of this idea of companies and even governments having to align more with China or the US, given their current foreign policymaking, what are you telling boards about how to navigate this period? To what extent do they have to choose?

Is Washington happy to help again? Is it more a case of can it help rather than will it help?

Well, I would differentiate between the White House, Washington, and the American people who are still broadly in favor of supporting Ukraine.

But President Trump isn't, and another development, um, that factors into this conversation is the, is that, um, the, you know, the, the dynamic duo of, of Russian-Ukraine diplomacy, Jared Kushner and Steve Witkoff, uh, have now suspended their efforts, and notably, uh, they never once set foot in Kiev.

All of their diplomacy was, was in the Kremlin.

Um, and, and again, I, you know, I, I, I am drawn to the linkages between the war in Iran and, uh, and in Ukraine, whereby US diplomacy is kind of fizzling out, which, you know, we have neither war nor peace.

We have no surrender.

We have no peace deal.

How much of this slump is linked to people not wanting to travel or spend their money in Donald Trump's America?

Give us your update on the veracity of the 15-point peace plan.

No one knows, Tom.

The idea of coordinating with Pakistan on this is interesting.

It is something that we heard through our sources over the last couple of days.

What I think is really, you, you know, fascinating and, uh, so important for kind of gaming out the power balance here is that Iran, having been presumed to be a, a weak military force, actually finds itself with more leverage than anybody thought right now and is issuing some pretty robust statements about its commitment to defending its land.

We've got a guy who's deal transaction-based, and that culturally, how is that Trumpian deal transaction process greeted by the Arab, and separately, by the Persian world?

How is it created by? Well, I, I, I mean, he is somebody who values making a deal above all, but also winning above all.

And what I think is very concerning is that it's hard to imagine, um, an easy win here.

There's a couple maps out of the tr- of the milit- should we be getting ready for some late-night action by the White House against Iran?

Well, as you say, um, the military buildup in the Persian Gulf is tremendous.

It's significant, and so the US kind of brought back the, [chuckles] the, the naval assets that were in, um, uh, off the coast of Venezuela to the Persian Gulf, but for what purpose? I mean, whether there is some type of, of US military action in Iran is a, you know, plausible hypothetical, as I like to say, even maybe a 50% likelihood.

But what I understand, and what I also know, having worked on some of these kinds of scenarios and wargaming in the past, is there really aren't any clean, kind of surgical strike options for Iran, which is almost certainly playing into the White House, um, hesitation.

You know, President Trump has got that hardware there, those military assets there, because, because maximum pressure is the name of the US approach to Iran.

I think the difficulty is that these guys are tough, and they are patient, and they think in terms of decades, and Trump gets bored.

Is there- is this something the president is really focused on, do you believe?

I think there was a moment after the Maduro extraction operation and the pressure on Greenland, where President Trump, you know, really felt like his tactics were bringing about results.

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...going to Windsor Castle, seeing the Queen's tomb, which, which I've seen by the way, um, it's, it's, um, really something to, to behold, as is Windsor Castle.

I think the emphasis is going to be on, um, the, the good links that exist.

But of course, in the background is going to be the fact that the UK Ambassador, uh, to Washington, Peter Mandelson, was sacked.

I saw that he's just been fired from the consulting firm, um, that, that he works for.

Could you frame that out for us? The, the way that we have seen China respond to this trade war, not on a bilateral basis vis-a-vis the, the US but with other countries in its orbit, and what's the message that it's trying to send here to Mexico with that announcement today?

Well, uh, let, let's put it in perspective.

I mean, throughout this kind of nine months where we've had this huge effort by the Trump administration to put forward, um, an overhaul of America in the world both from trade and security perspective, China's been quiet.Um, it has been able to, to, to watch, to observe, to occasionally signal where it stands with power, um, but it hasn't really risen to, um, the bait.

Uh, it is perhaps, you know, uh, unique a- among the world's largest economies in that, um, it has, still has this pause going on, on the Trump tariffs.

Um, so that, you know, strategic patience that we see from China, uh-

What are they telling you about their confidence in, yes, the way these policies are gonna stand, but how they're gonna be able to kind of plan and do business with them in place?

So, our, our clients, um, I think have, have kind of gone through the, the stages of grief with the previous status quo, uh, relationship with the United States, and indeed the, the global trade system.

Uh, and th- after, uh, several months I would say of a real chill evident in, in the C-suite, you know, in, in, in, in corporate, uh, America and indeed the rest of the world, I've seen a real increase in, in risk appetite and also just kind of getting on with things and, and finding, you know, new opportunities and, and ways to, to make deals.

That's not the case here, is it?

Well, not at all.

And so it strikes fear in the hearts of, of diplomats and foreign policy types because you never wanna put your, your leader in a position where he's not sure what's going to come out of the discussion, right? You want to, you know, game out the, the possibilities.

You want to have your, you know, your, your responses, uh, in reserve.

You don't wanna leave a lot to chance.

That's not the way that Trump works.

He's said before that he likes to decide at the last minute.

What is the incentive for Vladimir Putin to do anything here except a photographic moment?

How should the White House, the State Department respond?

Thanks, Tom.

Um, I think that we, we've got to be, um, very focused on the fact that we're not just looking at a, a bold Israeli attack on Iran taking out, uh, at least 20 of its senior personnel, uh, at one time, as well as some attacks on nuclear facilities, but the Ukrainian spiderweb attack, drone attack deep into Russia, which of course has nuclear capability, and the, the tariff war all happening at the same time.

Um, for investors that are having flashbacks to, you know, the last round of Iran-Israel tensions in 2024, we're in a really different environment.

But I didn't answer your question about what the White House and the State Department should do.

At the moment, um, it looks like, uh, the White House is, is trying to, um, give the impression that, uh, they were on board with these attacks when almost everything that we are hearing is that the White House, uh, was cautioning Netanyahu not to go for it, so both Netanyahu and Zelensky in Ukraine, um, you know, really not heeding Washington's warnings.

What's gonna go on at that 11:00 AM meeting today, Tina Fordham?

Yes, 11:00 AM, no rush.

How will your world change with drones that could kill, take out, uh, armament from a distance?

Uh, Ukraine launched an incredibly bold and audacious attack, um, 18 months in the making.

Uh, you've talked about the idea that this could signal a change in trend and, and others have, have written about, you know, China being able to do the same thing.

Um, but when we look at the markets, guys, right? W- we don't see a very big reaction at all, um, I think just because of the amount of, of news flow.

So, it's an example of something that is potentially, you know, a pivotal moment in geopolitics.

Uh, certainly one that means that, in the short term, there isn't going to be sanctions relief, uh, likely anytime soon, or a ceasefire.

Uh, but there's so much going on for investors to digest that it's not moving the needle.

And, and what does that mean just for that country's attitude toward, um, continued involvement in the war in Ukraine and Europe's involvement more broadly, th- the outcome of that election in Poland?

(coughs)

... with your last guest, um, as well.

The, uh, we, uh, we are trying to read the tea leaves and understand, uh, who has what brief, or is President Trump kind of, you know, acting as his own, um, counsel? Uh, and, uh, the, the meeting with h- his special envoy Steve Wyckoff, the, the, the subsequent meeting that he was supposed to have at the Kremlin, uh, was canceled.

Um, so I wonder if Trump is going to end up being, uh, frustrated after this conversation because, you know, in dating terms, what Putin is doing is called breadcrumbing.

A- and where, where does he go?

Well, I mean, I don't, I don't know that President Trump feels that he does have to maintain the commitment.

Um, he's expressed frustration with Putin.

He had previously, um, you know, to, to, uh, great effect expressed frustration with Ukrainian President Zelensky.

How does this move forward? Do we move our foreign diplomacy of Kissingerian realpolitik, of those against Henry Kissinger, do we move it forward by tweet?

You, you have no idea how painful (laughs) your words are, uh, to someone...

I mean, I've had the immense privilege of, of interviewing Henry Kissinger, uh, a couple of times, um, before he, he left us, and, uh, I'm a great admirer of, of his, uh, his colleagues, Madeleine Albright and, and others.

Um, y- you know, w- yes, we are.

This is the TikTok-ification of global politics, um, and it's definitely not helping investors and business leaders or global leaders work out how to deal with the United States.

Although, it will cause jubilation in some quarters.

But I mean, w- what are your discussions with your clients like these days?

I mean, in practical terms, this is an extremely difficult time to be, uh, the CEO of a company that has to get any goods from anywhere else.

Tina Fordham, can our listeners and viewers survive two months until the adults show up?

I think that sounds like an eternity.

Um, and I suspect that we're going to see a fairly, um, nuanced and sophisticated response from the European Union.

Uh, I think the tension is, is best framed as between, uh, placating Trump and, and retaliation.

And if you look at public opinion data in, in the European Union, um, there's strong public support for retaliating against the US, uh, but there will also be, of course, a desire to play nice, I think, to start with, um, and try to see about taking these down a bit, because 20% is, is, um, is harsh.

Well, lay it out for us.

Yes.

Uh, I mean, it was astonishing.