Donald Trump’s imminent return to the White House has America’s friends and foes questioning the direction of US policy and looking to avoid trade retaliation and other potential threats. Yet the global landscape offers opportunities for the president-elect to exploit, says Richard Haass, a senior counselor at investment bank Centerview Partners who served as a foreign policy advisor in several presidential administrations.
US inconsistency in acting as a “force for order” has contributed to greater disarray in a dangerous world, but the collapse of the Assad regime in Syria, the weakening of Iran, Hezbollah, and Hamas, and the situation in Ukraine have created an “extraordinary opportunity” to reduce conflict and promote peaceful solutions, said Haass, President Emeritus of the Council on Foreign Relations who served at the Pentagon under Jimmy Carter, the White House under George H.W. Bush, and at the State Department under Ronald Reagan and George W. Bush.
Haass, whose most recent book, “The Bill of Obligations,” calls for a redefinition of citizenship to emphasize that democracy involves duties as well as rights, urged the business community to take on a broader role — promoting greater civic-mindedness in a society that’s been losing faith in its institutions. He spoke recently with Ana Kreacic, Chief Operating Officer of the Oliver Wyman Forum.
Two years ago you said we were living in a dangerous decade. Does the return of Donald Trump to the White House represent more danger, or might his approach to foreign leaders be better suited to today's environment?
In no small part, longer term trends are what's making the world the way it is. But one of the factors that has contributed to greater disarray is that the United States has become a less consistent force for order. At times we've overreached and done things that detracted from order, like the Iraq War, and at times we've done too little.
There were things I liked about Mr. Trump's first term. Questioning the assumption that policy toward China was healthy was overdue. I liked the US, Canada, Mexico trade agreement. I was less enthusiastic about the deal he signed to leave Afghanistan, less enthusiastic about his threats to a lot to allies.
It's a dangerous world but it's also a world of enormous opportunity for Trump. Given recent events — the weakening of Iran, regime change in Syria, the weakening of Hezbollah and Hamas — there is extraordinary opportunity in the Middle East to harvest some of those developments and turn them into something enduring and good. I also think there's a real chance to bring about a ceasefire in Europe between Russia and Ukraine.
When you look at his plans for tariffs and then look at the countries holding US debt, do you see an opportunity there to negotiate a deal?
Tariffs can be used for any number of reasons. Tariffs can be used to leverage behavior in non-economic areas, like helping persuade Mexico to do certain things on border issues. Tariffs can be used most appropriately when another country is dumping goods through subsidies, which China is doing with electric vehicles.
I don't have a lot of enthusiasm for tariffs to protect American industries that can't compete on a level playing field. So I hope we don't do too much of that.
Unlike the bipolar nature of the Cold War era, power is much more balanced today between the US and allies; China, Russia, and friends, and multi-aligned nations. Can CEOs play effectively in a multi-polar world without taking sides?
They cannot. In the technology space, they're increasingly going to have to choose between a US-led system and a Chinese-led system. That’s just a fact of life. Outside of technology, business leaders have to respect sanctions, whether it's against Russia or North Korea, or Iran and states that are supporting terrorism.
Business leaders don't operate in an apolitical world. They don’t have the luxury of carrying out an apolitical foreign policy. Whether it's access to markets or supply chain issues, we are all going to be affected by developments around the world.
Earlier this year the Oliver Wyman Forum and the New York Stock Exchange ran a big survey of CEOs of NYSE-listed companies, and fewer than 25% of respondents had in-house geopolitical experts. Are you surprised?
I’m not. The fact that I am a senior counselor at Centerview Partners is emblematic of the changed world. Some other places have people like me, particularly in the financial world. Some places have global advisory boards, others have consultants. But I don't see how you run a business without taking these factors into account.
It's difficult, I realize, because they don't easily lend themselves to something you can put on a spreadsheet, but that doesn't mean they're less important.
We are losing trust in institutions, in corporation, and in ourselves. What role can business play in rebuilding civic mindedness?
Well, it begins from the assumption that just because we're nearing our 250th anniversary as a democratic country, we shouldn't assume our future is baked into the cake. There have been sufficient warning signs over recent years that we ought to take them seriously.
What can the business community do? One is, make it easy for employees to vote and be politically active. Second, they could hold fora so people get better informed. This can be done from a nonpartisan point of view or across the political spectrum. Third, make it easy for people to take leaves of absence to work in government for a year or two, and bring skills there. Universities do it all the time, why don't businesses?
Business leaders also can speak out for the rule of law and for democracy. Virtually everything businesses do depends on the rule of law, on physical security and stability, on the perception that government is operating in a fair way. So business leaders ought to be in the forefront of supporters of democracy. And I would hope that businesses would be advocates for mandatory civics education.
Should business leaders build effective networks and develop personal relationships to help them stay informed and navigate geopolitical situations?
You can have all the personal relationships you want but if the United States and China are at war over Taiwan, those relationships aren't going to amount to an awful lot.
What you really want to think about are strategies that to some extent hedge against certain outcomes, insulate you from certain things. You want to look at supply chains and say, where are our vulnerabilities? Where do we need redundancies? What do we have to do to reduce the consequences of geopolitical interruptions. Or what if regulatory policy changes or sanctions policy changes and so forth? That’s the kind of conversation you want to have.
We have a lot of business leaders coming into the incoming administration, even by American standards. Is that a good thing?
It’s not a good thing or a bad thing. Rex Tillerson’s tenure as Secretary of State will not be competing with Dean Acheson or Henry Kissinger. Others who have come into government from business, like Douglas Dillon, former Treasury secretary under John Kennedy and Lyndon Johnson, have done well.
I would say, though, that what it takes to succeed in the business world often doesn't translate into government. Governments are less top down. There's more distributed authority, more people you have to bring on board to get things done.
No one would think that somebody who had never been in business should suddenly become the CEO of a big firm. But everybody thinks it’s great that someone who's never been in government comes in as a cabinet officer. I find that to be kind of strange.
Aside from the Middle East and Ukraine, what other parts of the world are you most excited about?
The part of the world that continues to be the most attractive is the Asia Pacific, for all sorts of reasons. And I think Africa is exciting because it's the one part of the world that really has population growth. It could be a blessing, it could be a curse, but it's qualitatively different than the rest of the world.
I'm always upbeat about this country. For all of our problems, you look at where the economy is, you look at the innovation culture — you've got to be impressed by what goes on in the United States.