The Geopolitical Landscape: How Tariffs and Alliances Shape America’s Future

Watching for any trade updates ahead of the August 1st tariff deadline.

Treasury Secretary Besson says talks are moving forward, but emphasized that quality matters more than speed.

From China's rare earth exports to the US to Trump announcing a massive $90 billion private sector AI investment.

Joining me to talk about what's behind the.

Lines says Matt Girkin, BCA researches, chief strategist of geopolitical strategy and US political strategy.

Matt, good morning.

Thank you so much for joining me.

So first and foremost, will Trump's reciprocal tariff strategy trigger a wave of last minute deals, or do you expect to see this weigh on market momentum here?

Well, good morning to you, Remy.

Thanks for having me on.

Yeah, I do think we'll see higher volatility.

The president has a 4.1% unemployment rate, so now is his last chance, the second half of this year is his last chance to push forward on the tariff agenda, gain leverage, and try to get those deals before he heads into 2026 in the midterm elections.

And so it's a question of will we see more turmoil before we get to those deals?

And I think the answer is yes.

And Matt, we know there are so many undercurrents in the current environment.

The broader strategic shift is raising bigger questions about new alliances being formed around the globe from rising tensions, economic decoupling, as well as competing ideologies.

So from your perspective, what is your take on what's unfolding and what are the long term implications here?

Well, I mean, the United States is undergoing a lot of vacillations.

It's domestically divided.

It's still at historically peak levels of polarization.

And while President Trump's re-election temporarily subdued that fight, what we see now is that his disapproval rating is going up.

He didn't receive a big bounce in approval as a result of passing the One Big Beautiful Bill Act.

And of course that bill is going to have mixed impacts.

There's some fiscal stimulus for consumers, but then there's also some cuts to government benefits that will create a backlash among some of the working class voters that the Republicans were trying to court.

And what you see is the approval rating for the president on the economy is actually a little bit lower than his general approval rating of 45%.

And this means that he's got a very narrow segment here.

Inflation is ticking up as a result of tariffs starting to feed through, and he wants to try to push these tariffs, get some trade deals, and then move on.

But the result is a very sort of narrow precipice.

He's got to try to walk, and in the end we are likely to see continued vacillation and turmoil in US politics in the coming years.

We still don't really have a strategic trajectory for the US.

It's really just trying to cope with inequality and polarization and the fact that there's challengers on the global stage.

Yeah, and Matt, speaking of the global stage this week, the EU and actually the EC and China will be meeting for their 25th summit, and we're also seeing other nations form alliances and gather.

So what does all of this mean when it comes to American?

Because here we are earnings season underway on Wall Street and we're seeing what's happening with American companies, how they're dealing with the changing dynamics when it comes to tariffs.

But when it comes to the bottom line as well as what it means for Americans, give us an overview here, Matt.

Well, you know, you're not wrong to point out that other countries are, of course, trying to negotiate and tighten their trade relations at a time when the US is raising trade barriers, but, but, you know, future presidents will be able to reduce tariff levels.

Just like President Trump has unilaterally raised tariff levels, and future presidents will be able to toggle back and forth the flow of immigration that they allow into the country.

So the changes that President Trump is making on the margin, they do address some geopolitical issues that Americans were facing.

But they also may erode productivity on the margin, and yet they can be reversed.

And so I don't think there is a permanent downgrade in US productivity.

I think the artificial intelligence story and the technological advances the US keeps making will show that the US remains the leading nation in the world, and I don't think we will see.

An alliance built around China other than Russia and a few other pariah states, and the reason for that is that China's refusing to structurally reform its own economy.

And so by overproducing goods, it's suppressing other countries' manufacturing sectors and from that point of view, the US will still find partners and allies.

OK, Matt Wold, always great talking with you.

Thank you so much for joining us on this Tuesday morning and as always, thank you for sharing your insights.

Thank you.