Sir Niall Ferguson decodes Trump, China, and the new world order

And if you had simply taken my advice back there coming out of Davos and gone long European stocks, short US equities, you'd have done very well and

you'd have been right.

Always trust Neil.

I would say that from my perspective, seeing the startup community, it's become electrified.

It's become electrified in areas of hard technology, defense tech, AI that can be used In that way, there is a deep, deep motivation.

And a lot of this was building over the last two or three years anyway, just a sense that Europe can do much more technologically than it has.

I think the interesting thing is that it's also provided a lifeline, in a sense, for industrial Germany.

All of those VW factories that were soon to be empty because all the cars are coming from BYD will turn into Rheinmetall factories at some point, and they will produce useful material for that eastern flank.

Then I got a little bit confused, though, in the last couple of weeks.

And I got confused when these big carrier strike groups, which have been the pride of the US military for decades, and I speak as an avid fan of Top Gun and Top Gun Maverick, both of which I have rewatched in the last month.

I'm just curious about why keeping the Red Sea open matters to the United States under the new Trump doctrine.

Oh, it's not hard to figure that out because thanks to the generosity of Mike Waltz, the National Security Advisor, and inviting my friend Jeffrey Goldberg into his chat group, we know.

And we know exactly why he and Pete Hegseth, the Defense Secretary, wanted to do those strikes against the Houthis.

Not particularly because of trade in the Red Sea, because of the need to reestablish deterrence, number one, and to send the Iranians a signal, number two.

And so I think this is perfectly reasonable in the sense that the Biden administration was very bad at deterrence.

It was really a group of law school educated people.

advising the president that if anything bad happened, you should de-escalate, above all else de-escalate.

And de-escalation turns out to be the functional opposite of deterrence.

If you de-escalate in Afghanistan by handing it to the Taliban, Putin will decide, hey, I can take Ukraine at low costs.

And if you try to de-escalate there, then the Iranians will say, hmm, We can do whatever we like in the Middle East.

These people aren't serious.

So I think the Trump administration, at least some of the more hawkish elements within it, want to reestablish deterrence.

And there's nothing like precision missile strikes.

This has been true since the 1980s to remind everybody that when the sheriff is around, you are actually quite vulnerable.

The Iranian point, though, is the more important one.