Jeff (00:13) Hello, this is Jeff Rittner and welcome back to Rittner Reflections Forum to address dynamic, complex, and essential nature of cross-border trade in our ever-changing world. I am really excited today to have Alex Capri join me. Alex is an American writer. He's based in Singapore where he teaches business at the Public Policy at the National University of Singapore. Alex just released his new book, Techno Nationalism at the beginning of the year, and we're gonna spend some time unpacking it. Alex, welcome to Rittner Reflections. Alex Capri (00:48) Thank you, Jeff. It's a pleasure to be here. Jeff (00:51) So I thought Alex before we jump into talking about your wonderful book. I wanted to describe to the audience how I know you, how we met and our first kind of our first encounter. was kind of a an interesting time. There's a mutual friend we have named Karen Murphy. Karen has been on this podcast before and Karen called me one day and said, hey, this author Alex Capri, do you know him? I said, no, she said, hey, He's going to be up in San Francisco at this book discussion. You should come. You should get the book, etc, etc. And Karen will not be not persuaded to say so. said, Sure, Karen, I'll do that. So picked up the book and started reading it. And I can tell you it didn't take me long to finish. In fact, I was done with it before the book event. So I showed up at the event. It was in San Francisco and I met Alex. We shook hands. You had your son there, Alex. And And the first thing you said to me was, hey, Jeff, I hear there's this Diego Rivera mural in the building. Can you, do you know where it is? And I said, yeah, I know where it is. I was there a few weeks ago and they walked me through it. I can go downstairs and show you. So we wandered downstairs and we sat there and looked at it for a bit. It was pretty fascinating. We, and then we took pictures of each other and it's an amazing mural. And so I thought I would just describe for the audience, you know, this mural was, painted by Diego Rivera. He is a painter and muralist from Mexico and he's known for kind of initiating the whole large scale fresco movement around the world. The Diego Rivera mural that is inside this building, it's Francisco City Club today. And I know it because the Asia Society has their office. They just moved into the building and so that's how I kind of got to see it. But anyway, it's in this building. This building was originally Stock Exchange Tower back in the 1930s. And Diego Rivera painted the mural in 1931. And let me just share with you some of the features of the mural that I found fascinating. I stood there and just looked at it. So number one is the central figure is California. And California is personified. And it's modeled after Helen Willis Moody, who was an Olympic gold medalist and a tennis champion. Now this mural covers two floors with a staircase in between, and it represents California's natural bounty, with fruits in her left hand, and its industries, including agricultural, aviation, and lumber. Now there are surrounding figures that include scientists, engineers, laborers, and they all reflect Rivera's socialist ideas and his admiration for the working class. The artwork extends to the ceiling. It depicts planes, nude figures, and a person personified sun. So Alex, I was thinking about that mural and I was thinking since we met a lot about your book and in some ways it really is very similar to the Rivera mural. ⁓ You do an outstanding job of illustrating how techno-nationalism is reshaping the world we live in today in many incredible and unexpected ways. Alex Capri (03:37) Yeah. Jeff (03:47) And like the mural, your book addresses the multifaceted geopolitics and technology and society. And it's a book that you really have to just dive into. And I think you walk away from the book just really having a wonderful picture of our world today and what's going on every single day. And so I just, found that the comparison was very unique and just wanted to share that with you as we start our discussion today. Alex Capri (04:16) Yeah, I mean, and that is a really, really thoughtful and actually a very colorful sort of description of the themes that are woven through Diego Rivera. When you think about it, and I'm just picturing the mural right now as we're talking, the ideas of capitalism and technology, right? Jeff (04:31) Yeah. Alex Capri (04:37) and sort of the power multiplying effects of technology and capitalism together and the distortions of power, if you will, that we are seeing playing out today in the international landscape, right, as nations compete for the things that we're gonna be discussing later on in this podcast. So. Thank you for that. I've never thought of Diego Rivera in that way, but you've definitely hit a light switch there. Jeff (05:05) Yeah, well, it was just uncanny when I thought through the similarities. you know, the book, as I said, I found it fascinating. In many ways, it described Alex, just my life over the last 10 years. And so I'm really, really excited to kind of get into this. Maybe to start with, just for the audience sake, if you could just describe what is techno-nationalism? I mean, how does it differ maybe from just, you know, traditional nationalism or? national security and so on. Alex Capri (05:31) Yeah, so we're hearing about all kinds of nationalism now, right? As we go through this historic inflection point, economic nationalism, obviously the title of my book is techno-nationalism. And really what it means is on a national level, a nation state, right? The power elites, the entities that govern particular nation states now are fixated on the linkages that exist between leading edge technology and national security, more broadly on economic strength and even security. And now, because of the technologies all around us in the 21st century, the issue of social stability is linked to techno-nationalism. Jeff (06:16) And how, Alex, how does globalization that we've all been living under, how does that either contribute or work alongside techno-nationalism? mean, is there a comparison there or is it the same? Alex Capri (06:31) Yeah, no, so look, if we look at the last four decades and the commencement of the fourth industrial revolution, which is fundamentally about computing power and connectivity, right, those are the two underlying forces that have really pushed the innovation envelope in all foundational and emerging technologies. If you look at what transpired over the last three and a half decades really? mean, starting when I was starting my career as a US customs officer, right in the late 1980s. And that, as we saw the convergence of the fourth industrial revolution with the application of liberalization of trade and neoliberal thought. Obviously the end of the first Cold War, the emergence of the United States in its so-called unipolar moment as the single superpower, and then of course China joining the WTO in 2001. All of these things converged to create what I describe as the fastest and the largest transfer of wealth in human history. You know with investment in offshoring taking place, you know in Asia mostly in China And all of this happening again because of Technology right and technology was lowering barriers to entry. It was it was allowing for What Richard Baldwin the the trade economists would describe as an unbundling right? It was facilitating even more unbundling of global supply chains, right where you could you could rationalize those supply chains and you could move very specific operations, very niche oriented operations, pretty much anywhere in the world, right, where there were favorable conditions that would lead to greater efficiencies and so forth. So all of this stuff happened at once, basically, and suddenly, very, very quickly, and we saw this really come to a head as a a sort of Western backlash and a Western paradigm shift occurred regarding China. People realized that technology was where you win or you lose geopolitical competition, economic competition. Technology is going to determine whether you do have strong defense or whether you are vulnerable. It's, you know, again, the very rapid increase in, you know, connectivity, the power of connectivity, computing power now, of course, we see cognitive AI defining techno-nationalism. You know, as all of this happens, we now see techno-nationalism as a very, very central part of the geopolitical landscape. Jeff (09:19) Right, no, I think that's really well put, Alex. in your book, you talk about technologies, you refer to them as the 12 power multiplier technologies. Can you kind of describe some of those? And if we think about the techno-nationalist policies, are there certain industries that are going to win and some that will lose, or how do you see that? Alex Capri (09:41) Well, I think there are the 12 underlying those are the core power technologies because essentially enable every other kind of foundational industry. So the 12 would be, you know, obviously semiconductors, right? Semiconductors I describe as the ground zero technology because you need semiconductors for virtually any other kind of foundational or leading edge technology. So you have semiconductors, then you have all the areas or permutations if you will intelligence. So that includes cognitive AI, includes software, that includes large language models, for example, data science, all of that stuff can be lumped under artificial intelligence. There's quantum sciences, of course. There's hypersonic sciences, biotechnology, aerospace. I write a lot in the book, as you know, Jeff, about the new space race, right? Obviously, there's anything to do with communications, advanced materials, advanced manufacturing. These are all really important things, sensing and timing and navigation type technologies. These are all hugely, hugely strategic technologies now, for all the reasons we've discussed. And we're going to see more and more action around the core elements. of techno-nationalism, I think are important to discuss when it comes to 12 power multipliers. So let me, if I may, let me just run through those elements really quickly. The first is, Jeff (11:22) Yeah, sure. Alex Capri (11:25) your listeners will, of course, recognize a lot of this, and I'm sure a lot of the people listening are grappling with these things in their day-to-day jobs, but the first is the weaponization of supply chains or value chains. So that... That essentially means that a government looks to basically choke off the transfer of a particular technology to other entities. So, you when we think of supply chain weaponization, of course, we think about export controls, sanctions, but also on the other end, you know, there are restrictions on acquisitions. And then there are also, you know, there are also restrictions on outbound flows of capital, for example, right? So I think we'll see more of those types of activities in the months and years ahead. The second element is because of the first element, and that is decoupling of supply chains, right? So I use the term decoupling carefully because I'm talking about strategic decoupling. You know, we're not seeing a full decoupling, obviously, of the US and Chinese economies. Although, you know, depending on what happens with these trade wars, I think we might see more decoupling than I would have anticipated beyond just the strategic technologies. The third element is reshoring, nearshoring, essentially restructuring and reconstituting value chains, right? In potentially geo-fenced or ring-fenced environments that would mitigate the risks of these things that we've been discussing. Then I think the other elements that are also very important that I weave throughout the whole book are the practices of industrial policy or what I call innovation mercantilism, where governments are now very actively looking to be catalysts, right? Through public-private partnerships, through incentives using the carrot and the stick, are looking to push research and development, manufacturing supply chains into very specific groupings or areas or partnerships. The CHIPS Act would be an example of that. in the US. And then I think the final one, I mean, there's actually two more, but the one I think that is really important is tech diplomacy, right? How do governments work together to pursue their own techno nationalist agendas, right? Whether it's to enforce export controls, or whether it's to push reshoring or innovation partnerships. Jeff (13:44) Mm. Mm-hmm. Mm-hmm. Mm-hmm. Yeah. Alex Capri (13:57) The sixth element is really more of an existential phenomenon, and that is that we have to look at everything that I've just discussed here in the context of a hybrid kind of Cold War, where good and evil walk next to each other in almost every realm of the economy. And at any point, Jeff (14:17) Hmm. Alex Capri (14:19) because they exist in this kind of murky gray zone, especially when we talk about dual use technologies. At any point, one could be compromised through a cyber intrusion, again, a techno-nationalist motivated cyber intrusion, a theft, attack, or obviously it could involve Jeff (14:34) Mm-hmm. Mm-hmm. Alex Capri (14:41) exposure to fake news and disinformation and influence campaigns all of this is happening it's swirling all around us as we engage in our day-to-day Jeff (14:48) Mm-hmm. Alex Capri (14:51) right Jeff (14:53) Yeah, No, I think that's very helpful, Alex, to kind of go through that. And if I could say, you know, when I started in my career at Intel, we were just wrapping up the first Cold War. And many of the things that I see today look very familiar to how life in the world of trade was back in the late 80s. and so on. You see a lot of that. I I come out of the semiconductor industry. And if I think about what you just walked us through, as I said earlier, I lived through each and every one of those. We saw over a period of seven or eight years, we saw export controls just accelerate. And most of it was designed to keep these critical technologies from certain players. Right. We saw the decoupling. I mean, under the Biden administration, there was Alex Capri (15:36) Yes. Jeff (15:42) there were three out of four actual rules about AI targeted primarily at China that was all intended to completely decouple any. you know, any product, any technology sharing with China, right? So we saw that, you we saw the, meant, you talked about the tech diplomacy and how countries are trying to come together. We saw the US and Japan and the Netherlands and, know, trying to come together to figure out how they could make sure that everybody was applying the same expert controls as they dealt with this challenge. So I definitely could see all that playing out as you described it. Alex Capri (16:17) Yes, yes. And I think what has really thrown a lot of observers of international trade and practitioners and obviously the whole global economy is that under the Trump administration, when it comes to particularly the tech diplomacy angle of things, where you work with your ⁓ strategic partners, your historic allies, because Jeff (16:34) Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (16:41) because of the imposition or because of the threats, the ongoing threats of tariffs and tariff wars and what that's done to the United States' strategic partners, right, in terms of ⁓ forcing them to rethink their relationship with the United States, forcing them to rethink who they're gonna be trading with and frankly, whether it's in their own interest to either Jeff (16:53) Yeah. Yeah. Alex Capri (17:08) embrace or abide some of these requests by the US, certainly around export controls. I was not expecting this degree of chaos at this point in time. I did actually think that the Trump administration would actually double down on a lot of what the Biden administration had done. And they were methodical when it came to tech diplomacy, right? And when it came to Jeff (17:17) Hmm. Yes. Yes. Alex Capri (17:33) rolling out, as you point out, Jeff, really three rounds of historic export controls aimed at China, right, on mostly semiconductors, but also AI and other technologies. So those aspects of techno-nationalism are playing out. But everything else, regardless of what the United States does, regardless of what China does, Jeff (17:38) Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (17:57) the core behavioral traits, the core elements of techno-nationalism, we're seeing those things live, right? Day to day, all countries are assessing their national security. They're all assessing from a technology standpoint how they are able to embed themselves in the right value chains, right? In the right trading relationships. And how to, frankly, how to mitigate Jeff (18:11) Mm-hmm. Right, right. Yep. Alex Capri (18:23) damage, how to mitigate risks from the collateral damage from tariffs and just geopolitical competition. Jeff (18:25) Yeah, yeah, yeah, yeah. Yeah, and I wonder, Alex, just thinking this through, kind of fast forwarding a little bit, you know, do do you envision a world in which the the US stands alone and you've got all these different countries that have kind of found ways to who they're going to align with this so on? Or do you think that there's a way to achieve some of these objectives and still manage to work alongside others? Alex Capri (18:56) Yeah. Well, you know, I think the U.S.-China competition is still sort of at the central of the this whole geopolitical drama that we're seeing playing playing out. So to the extent that a country like Japan or South Korea or Taiwan has to look after its own techno-nationalist interests, those countries will do so. But I think because of the historic relationship that exists, for example, between China and Japan, South Korea and China, et cetera, obviously the Taiwan, mainland China relationship, I do think that those countries will continue to work with the United States, to do their best to work with the United States and to cooperate and to... Sees upon opportunities to work with the US at the same time You know China as a trading market Has been a very important market for them as as it has been for American companies But I do think that we are going to continue to see on the export control front. I do think we'll see the US continuing to to roll backwards, in other words, to go after less and less advanced technologies, whether it's know, H20, NVIDIA's H20 chip or other, you know, strategic technologies. I think we're going to continue to see more and more of that. So those, those countries and of course, Holland, right? And the Netherlands, when it comes to ASML, right? The EUV chip maker and any other countries that, that happen to be Jeff (20:27) Mm-hmm. Yep. Alex Capri (20:35) making very strategic technology and happen to be historically intertwined with the US, I think they're going to continue to still be fairly closely allied with the US. I think where we'll see them look to divert and to maybe even decouple from the US, I think will be more in other trade-related lanes, if you will. Jeff (20:59) Right, but on the topic of export controls, this is what I spent most of my career doing. And when we had the original Cold War, we had COCOM, then we had Wassanar, and this was, I think at one point it was up to 39 countries, and everybody agreed that what they would control would be the same. Now today, if we go to today, it seems like everything is, Alex Capri (21:11) Yes. Jeff (21:25) around China, but I'm not sure it's the same situation if that many countries are willing to band together and restrict everything from China. Alex Capri (21:34) Yeah, yeah, this is a really interesting question, Jeff. mean, the the thing that I'm hearing a lot now is, look, because the US has has just inflicted so much self damage on itself and on its strategic partners, that this is the golden moment for China, right? This is the this is the moment for China to step in and present themselves as a stable trading partner. as a consistent, predictable actor and so on. And I think that's true to a certain extent. But I think if you look at China's relationship with the West in general, and you look at China's relationship with Europe, with the European Union, and the other countries that I mentioned, right, in Asia, you know, could throw in Australia, New Zealand. And we can come back to the Southeast Asian countries a little bit later and talk and talk about them. But in terms of China stepping in as a replacement for the U.S. with the Europeans, I'm not sure that that's really something that that's going to happen on a on a very pervasive, a large scale and a couple of reasons for that. The first is that when it comes to Europe's security and defense, and we look at, for example, what's happening with the Ukraine war, right, with Russia-Ukraine, the fact that China is and has been supplying Russia with technology, right, with information that allows it to sustain its war efforts, if you will, right, in Ukraine, the fact that, you know, in an increasingly chaotic world where it's not certain what how the US is going to behave when it comes to supporting NATO and actions by NATO. I think the fact that China is seen as a Russia, you know, as a Russian sort of facilitator, I think we have to be really, really careful about what we talk about when we say, where is the trade going to increase? I think Jeff (23:15) Mm-hmm. Mm-hmm. Alex Capri (23:35) those 12 strategic power multiplier technologies, Jeff, whether it's Asia, whether it's the United States, I think we're gonna see a pretty clear bifurcation of those supply chains and those technology stacks between Europe, China, America, China, et cetera, Japan, South Korea. So that's number one. I think number two, and this is more of a trade-focused kind of analysis, and that is that, you know, Jeff (23:38) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (24:05) Let's just say that the US keeps tariffs in place. We're at 145 % potentially today. I think they've actually been, those are the tariffs now, right? So where is, I mean, again, the US, even though it's the world's largest economy, it only makes up for about 14, 15 % of all sort of imports, exports, right, global trade. Jeff (24:14) Yes, Alex Capri (24:28) If you throw in services, I'm talking about trading goods, right? If you throw in services, it's much higher. But the point there is that China's gonna have a lot of excess capacity, They've got a lot of stuff that they've manufactured that's inexpensive, right? And they're gonna wanna dump it somewhere, right? So. Jeff (24:42) Mm-hmm. I was reading today they want their own citizens to start buying more. that may be... Alex Capri (24:49) Yeah, well they might be able to with a high savings rate there, you know, they might be able to start spending more but the point there is that whether you're a European country or even a Southeast Asian country or a global, you know, country in the global south, if China's got a ton of excess capacity in their, their, you know, trading goods, you might be out of luck, right? Or, or, so, so I, so I think those issues, those issues sort of, Jeff (24:53) Yeah, yeah, yeah. Alex Capri (25:14) dilute a little bit, I think this narrative that China is somehow going to step in and eat the United States' lunch. Having said that, though, there clearly will be diversion, right? There clearly will be countries working to trade more and more around the United States. But I think those core strategic technologies will, as I mentioned, will continue to, the global economy will continue to to segregate and bifurcate around those. Jeff (25:44) Right. And I think one of the examples you raise in the book was Huawei. And Huawei to me, I live my life, good part of my life dealing with Huawei. I'll never forget the day on May 19th, 2019 when they were put on the entity list and the rest is kind of history. And I haven't had a chance to visit Huawei. I've been in their facilities and I was just really amazed at how advanced Alex Capri (25:50) Yes. Jeff (26:11) They are the products they're producing from phones to cars, you know, and so on. And so when I think about the export controls and I think about this idea of keeping kind of decoupling and keeping China at bay, if you will, it doesn't appear to be working very well when I look at Huawei. So I don't know what you have any thoughts on on that. Alex Capri (26:14) Yeah. Yeah. Yeah. Yeah. Yeah. And I have an entire chapter in the book on Huawei. So look, Huawei is a really impressive company. OK. I mean, there's no there's no question that that Huawei's global footprint was was aided and assisted with a lot of state help. Right. In terms of a lot of subsidies, you know, obviously, you know, working working with with other Jeff (26:40) Mm-hmm. Alex Capri (26:56) other governments, particularly in the global south, giving them, you know, interest free loans, know, a state backed interest free loans, etc. Very, very long terms, and many, many things, right. But they also happen to make, you know, pretty, know, pretty good stuff, right. And they've got they've got 10s of 1000s of engineers. They did, you know, they did a good job of licensing. Jeff (27:14) Mm-hmm. Mm-hmm. Alex Capri (27:24) Ton of technology from US companies right that was all part of the of the business model, right? So that you know, they acquired a ton of technology they paid a lot in license fees and then you know, think when you look at the emergence of China's Belt and Road right the digital Belt and Road and you look at the ecosystem of Chinese companies that Jeff (27:28) Right. Mm-hmm. Mm-hmm. Alex Capri (27:47) worked together with Huawei, right? You had all of the cloud companies, you had the AI companies, SenseTime, you had the surveillance companies, you had the drone companies, so many different Chinese companies that were part of this very, very large ecosystem. Jeff (27:58) Mm-hmm. Mm-hmm. Alex Capri (28:08) So, know, Huawei is, you know, is I think at the heart of Chinese techno-nationalism. I argue that they are the most important company, the most important Chinese company from a geo, whether they like it or not, right, from a geopolitical perspective. So, you know, and they're also now, as you know, Jeff, they're very, very centrally involved in China's efforts, you know, as it doubles down on efforts. Jeff (28:13) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (28:32) to build its own indigenous value chain for chip production, right? They're involved in so many different ways as an R &D partner, as a telecommunications partner and so on. Jeff (28:47) Right? Yeah, that raises a good point, Alex, going back to semiconductors. So, you know, there's a going back to the Chips Act and going back to, the US desire to bring more advanced chip manufacturing to the US because there's this desire to be ahead of China. But at the end of the game, you know, how long will it take China to catch up in this space and become self-sufficient when it comes to manufacturing their own chips? Alex Capri (29:14) Yeah, so one thing I think is really important, and we've had this discussion before, is we need to make a very clear distinction between so-called legacy chips and leading edge chips, right? So I think when it comes to fabricating a seven nanometer or larger chip, I think China, they still are dependent. You know, as far as I know, unless there's been a breakthrough very, very, very recently, but, you know, they're still dependent on foreign DUV ⁓ technology, right? So that goes back to our, you know, your point in our discussion earlier about export controls and whether or not the U.S. can work with the Dutch, for example, and, you know, obviously there's a, you know, Jeff (29:47) Yes. Yep. Alex Capri (30:03) other companies that do etching and metrology equipment, et cetera, materials and LAM and others, ⁓ whether or not they can effectively stop A, the stockpiling of that equipment, which the Chinese have done very effectively. And as you know, the way our export control system works in the US, there's a very public process, a very transparent process from the time that there's an announcement that Jeff (30:07) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (30:28) export controls could be coming and when they actually go into effect, right? So there's a long runway there to be able to go out and absolutely scrounge up as many of these chips as you can and stockpile them. So I think there's that issue. There's the black market. There's the transshipment of chips, which we're seeing with writ large with Nvidia chips. Jeff (30:32) Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (30:52) that are making their ways into China, maybe in smaller numbers, but they're trickling in, constantly making their way in. So as I write about in the book, there are a lot of workarounds still when it comes to current export controls. And to your question, going forward, will export controls alone... Jeff (30:53) Yep. Mm-hmm. Mm-hmm. Mm-hmm. Yes. Alex Capri (31:14) you know, be sort of the right kind of strategy to try and win the innovation race or it is or, you know, you know, the whole notion of making someone else's horse run more slowly while you try to make your horse run faster. You know, do you you just try to make the other guy's horse run more slowly or should you focus more on making your horse run faster, right, or keep the lead? So I think I think it's it's it's going to be both right. We're going to continue to see both. Jeff (31:17) Mm-hmm. Mm-hmm. Yep. faster. Yeah. Right, right. Right. Alex Capri (31:43) But again, have US efforts around export controls led to a doubling down of Chinese efforts to build their own technology? Of course it has, right? And that's not gonna change. Jeff (31:50) Mm-hmm. Mm-hmm. Yes. Yes. Yeah, and my concern is, you know, in order for the export controls to be effective, and we talked about this earlier, it's going to be multi-country agreements, not only to develop the same rules, but to enforce them. And that's always a challenge. And, you know, in this new world where... Alex Capri (32:11) Yes. Jeff (32:16) We are probably making more enemies than friends. I worry that some of these countries, they're losing business by not being able to sell their equipment. Right? And at what point do they say, hey, forget it. I'm to go ahead and keep selling. Alex Capri (32:20) Yeah. Right. Yeah, that's right. And that's that's the problem with chaos, Jeff, is, you know, when you unleash chaos either intentionally or unintentionally, you know, each country has its own techno nationalist objectives and needs, you know, and it all comes down to national security and economic and social. So at some point when Jeff (32:35) Mm-hmm. Yeah. Right. Sure. Yeah. Alex Capri (32:55) when an existential crisis is visited upon a country, whether it's around energy security or food security or now technological security and chip security, yeah, think it's gonna be a pretty tumultuous world. ⁓ But ultimately, I think, Jeff (32:58) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Yeah. Yeah. Mm-hmm. Alex Capri (33:17) the United States is going to have to regroup with its allies. It's going to happen because again, I just don't see the Europeans or the Japanese basically teaming up with the Chinese, right, when it comes to these types of strategic technologies. Jeff (33:29) Right, right, right. Yeah, I think I agree with you and that's the hope. But as you point out, when there's things can go lots of different ways. A good example of that is the pandemic. Alex Capri (33:42) Yes. Jeff (33:43) I don't know if I would necessarily describe that as chaos, but I would describe it as significant enough to completely change supply chain and make changes to how we're operating today that came out of that. Alex Capri (33:56) Yeah. And I think the pandemic is a really good example of sort of this nationalist impulse that all nations have when there is an existential crisis. Right. So in the pandemic, I mean, if ever there were a time in history when nations should have worked together collectively, right, to, you know, come up with a vaccine, to distribute the right kind of medicine and masks and ventilators, et cetera, we saw exactly the opposite. Right. We saw we saw countries hoarding. Jeff (33:59) Yeah. Yeah. Right. Mm-hmm. Right. Yeah. Right. Alex Capri (34:25) putting limitations on exports of this type of equipment and so on. We saw the same thing with energy, right? Right after the invasion of Ukraine, right? By Russian forces, where the European nations in particular, before they were able to try and look for other sources of natural gas, for example, they were willing to completely Jeff (34:37) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (34:51) throw out any kind of sustainable energy initiatives and just start looking for fossil fuels anywhere, right? So I think again, national security, existential threats, companies, countries rather, will do whatever it takes to ensure their own security. Jeff (34:54) Mm-hmm. Mm-hmm. Yeah. Yeah. Yeah. Yeah. Right, absolutely. Yeah, and you know, when I read your book, Alex, you know, it helped me kind of make sense of the world that I was kind of operating in, you know, at that moment. Since I read your book, the world has gone completely crazy. As you know, you've described it's, you know, chaos, you use the word chaos, it's unpredictable. I use the word uncertainty. We're in this incredible time of uncertainty. Everybody doesn't know what's going to happen next. So I asked you this question the other day and I'll ask it here on the podcast is, know, given where we're going, what we see happening where we're going, do you think any of that changes the points of your book? Alex Capri (35:26) Yeah. Yes, we have. Jeff (35:50) at all, if so, in what way and if not, why? Alex Capri (35:55) Yeah, well, let's go through the six, right? The six core elements, right? I mean, will supply chains continue to be weaponized? Will we see more export controls, potentially more sanctions, and the other elements, outbound investment, acquisition? I think yes. I think we'll continue to see it. Maybe the parties that are executing those things may be somewhat surprising, but... Jeff (35:57) Right? Mm-hmm. Mm-hmm. Yeah. Right. Mm-hmm. Mm-hmm. Right. Alex Capri (36:19) Yes. So I think that remains the same. Do we see a need for de-risking and decoupling of strategic supply chains? Absolutely. That will continue amongst this greater uncertainty, as you point out. Will we see reshoring? Will we continue to see reshoring? Yes. Yes, we will. ⁓ Now, again, with the Trump 2.0 sort of application of tariffs, Jeff (36:25) Yeah. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (36:45) using sort of tariffs as a blunt instrument, right, to just try and get people to just sort of leapfrog over those tariffs and invest and build in the US. I don't think tariffs, I mean, there's no question that historically tariffs, if used appropriately and intelligently, absolutely create incentive for leapfrogging and investment, but they have to be combined. Jeff (36:49) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (37:11) with incentives, right? There have to be, and that's where intelligent industrial policy comes in, right? Where there is money made available and of course there's tax concessions and all kinds of things. So I think what is a little bit different now, at least where we are at this particular time and it's what, April 2025? And that is that, Jeff (37:13) Mm-hmm. Right. Right. Yep. Alex Capri (37:37) The Trump administration is leaning very heavily on tariffs and hasn't been speaking favorably, for example, about the CHIPS Act, but they're gonna have to figure, they're gonna have to use incentives as well. So yeah, so I think that's changed. I think the other area around innovation, mercantilism, where governments are looking to push their own industries and sectors, that continues, right? Jeff (37:44) Yep. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (38:00) ⁓ Certainly tech diplomacy, and this is what I mentioned at the top of our podcast. The US, if it wants to successfully prosecute its supply chain weaponization and even its innovation ⁓ policies, it's going to have to make friends. It needs friends, right? It needs allies. And again, this is painful to watch, right? This is very hard to watch. Jeff (38:05) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Right. Yeah. Right. Yeah. Yeah. Alex Capri (38:27) ease off on the tariffs and, like I said, work more on the carrot versus the stick. I think the other stuff, does the world remain sort of this murky, of hybrid Cold War? Yes, absolutely. Do we continue to see major reorganization of the global economy around these tech stacks? Jeff (38:29) Hmm. Mm-hmm. Mm-hmm. Right. Right. Right. Do you think US and China will come to an agreement, a deal? Or is that a long shot? Alex Capri (38:54) Oh boy, I tell you, know, the thing about trade wars, Jeff, is they can escalate so quickly and it takes years to unwind these types of things, right? You know, if you go back to the Smoot-Hawley tariffs, right? And, you know, this was in the what, the 1920s, right? Jeff (39:10) Mm-hmm. Mm-hmm. 20s, yeah. Alex Capri (39:21) And you look at how they helped precipitate the Great Depression and how beyond just the tariff wars, you had current, you know, competitive currency devaluations. You know, you had all kinds of things happening because of this, you know, really oversimplified trade imbalance kind of rationale, right, to trade. You know, if you think about it, it was really, took the whole post World War II Bretton Woods agreement Jeff (39:36) Hmm. Alex Capri (39:50) Decades decades to unwind those tariffs right because that's you know the GATT rounds ⁓ That was all about unwinding tariffs, right? So, you know all I can say to your question about you know, will they reach a deal? I I I hope so and I hope I hope that you know, I hope that they reach a point and I'm being optimistic with this. I hope that we see a point of sort of competitive coexistence Jeff (39:51) Hmm. Mm. Yeah. Yeah. Yep. Yeah. Yeah. Alex Capri (40:19) where we, know, the corporate world, the markets, we accept the fact that the global economy is bifurcating, right? Again, on techno-nationalist grounds. But there are still other trading lanes out there. And obviously these supply chains are gonna be restructured. And so there are sort of new markets opening up, new investments happening. Obviously technology increases productivity. Jeff (40:27) Mm-hmm. Yep. Alex Capri (40:44) So even though we may have diminished volumes of trade in some of these strategic sectors, AI and other technologies will boost productivity domestically, economies will grow, wealth will grow, there will be other opportunities, right? And again, well, not again, because I don't think I've mentioned it yet on this podcast, but I don't think that we're undergoing a Jeff (40:47) Mm. Mm-hmm. Yep. Yeah. Yeah. Alex Capri (41:12) total deglobalization process, right? ⁓ It's, as I've been saying, and as I write throughout my book, it's a reorganization process. ⁓ Or to use that term, it's a kind of geopolitical creative destruction, right? It's not just new technologies pushing out old ones, but it's also the geopolitical landscape realities. It's realpolitik, today's realpolitik. Jeff (41:14) Right, right. Yeah. Yeah. Yep. Yeah. Yeah. Alex Capri (41:38) creating and destroying the old status quo and sort of creating these new status quos that do have economic upsides to it. Jeff (41:43) Mm-hmm. Yeah. Right, right. Yeah, I appreciate your optimism. I am an optimist by nature. mean, a real optimist. I I'm out there, but I look at this situation and I'm struggling because you've got two very powerful men with strong egos and completely different philosophies. and ultimate objectives. And I just I don't know how you how you kind of arrive at something that both can walk away and feel. The only thing I can think of is that maybe it just becomes a coexist for four years until the next sheriff comes into town. I don't know. Alex Capri (42:21) Yeah, you know, I think, well, let me put it this way. I hope that the following things will happen. One is that whatever negotiation takes place takes place quietly and behind closed doors. So I think what the Chinese just don't do is, they're not known to do is, Jeff (42:34) Mm-hmm. Alex Capri (42:45) they don't respond well to public, ⁓ sort of public displays of national pride from an opposing power. They're very thin skinned, I should say, when it comes to what could be perceived as a loss of face or a ⁓ lack of respect, right? So I think... Jeff (42:48) Yeah. Mm-hmm. Alex Capri (43:07) getting the right, know, keeping the right channels of communication open quietly, not even necessarily at the most senior levels, but at levels that are accessible to those senior levels. I think that's going to be very important. The other thing is, and I think this goes for all countries, and we're talking more now just about diplomacy, right, you know, rather than the techno-nationalism, but I think it's really important to Jeff (43:16) Mm-hmm. Mm-hmm. Mm. Mm. Alex Capri (43:33) you know, if any country that gets put in the crosshairs of the Trump administration, and of course the practices to single out individual countries, ⁓ I think it's really important to just have a very measured response and, you know, hopefully again, you know, have major discussions ⁓ sort of on the quiet. Jeff (43:42) Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (43:59) if possible, right, or negotiations. Because I think Jeff (43:59) Right. Right. Right. Alex Capri (44:01) if there's one thing we know about this current president is, you know, anything that's said or done publicly, ⁓ you know, just escalates, right? But I, you know, I think... Jeff (44:04) Mm-hmm. Mm-hmm. Right. Alex Capri (44:11) You know, I have this discussion with my students at NUS a lot, and I find that more and more, and these are MBA students and these are graduate students with some work experience and some wisdom, some worldly wisdom. And I think the narrative that the US and China can work together on climate change issues, for example, potentially on Jeff (44:14) Mm-hmm. Hmm. Mm-hmm. Yep. Alex Capri (44:37) building guardrails around AI, right? Around AGI in particular, and autonomous AI. These are things that give one pause, right? And say, well, maybe these two arch rivals can figure out ways to work on that, right? Jeff (44:40) Mm-hmm. Mm-hmm. Sure, sure. Alex Capri (45:00) But I don't see the clean tech thing happening in the next four years. That's certainly not gonna happen. Interesting how the Europeans, clean tech being a major dual use technology, and also again, the strategic issues around depending on China for lithium batteries or even critical minerals, those are problems, right? Those are challenges. Jeff (45:07) Right. Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (45:28) You know, what does that leave us with? AI? know, well, I mean, if we look at the direction that the U.S. administration is taking, it's all about just removing the guardrails, right? Because it's all about just raw Hobbesian competition in a nasty, brutish world. And, you know, it's about, you don't put any restraints. Jeff (45:38) Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm. Hmm. Hmm. Alex Capri (45:52) in place, right? So ⁓ I can see why it would be easy to be pessimistic, ⁓ but I'm going to remain, I guess I'm going to try and remain optimistic here. Jeff (45:52) Mm. All right. Mm-hmm. Optima, yep, yep. I'm with you, I'll try as well. Well, Alex, I'm just mindful of the time and we've been talking for a while here. It's been fascinating. Before we log off, there any something we didn't get to you wanted to talk about or is there a key point you wanted to make before we wrap up? Alex Capri (46:06) you I think we covered a lot of ground, You know, I think we didn't really talk about DeepSeek, right? And, you know, how big of a game changer was it or was it not? I think I'm still in a wait and see mode there. mean, clearly, does bring into focus this sort of the open versus closed model, you know, for developing Jeff (46:31) Mm. Mm-hmm. Mm-hmm. Mm-hmm. Mm. Right. Alex Capri (46:49) know, technology and, how does that affect techno-nationalism? You know, I do think that the open model, you know, the open source model does lower the barriers to entry to a lot of players, you particularly if they're able to do it much less expensively and they can extract the same kind of results, right? The power, the AI results. I think, though, at the end of the day, Jeff (46:53) Mm. Mm-hmm. Mm-hmm. Right. Mm-hmm. Right. Alex Capri (47:13) The whole drama that we've seen around advanced chips and the weaponization supply chains and all the things that we've been talking about, I think that until China can actually produce its own super advanced chips, I think that's gonna remain a major focus, a techno-nationalist focus, I think for quite a while to come. Because at the end of the day, Jeff (47:21) Mm-hmm. Mm-hmm. Mm-hmm. Alex Capri (47:40) in all those other power multiplier technology areas, super advanced chips are still gonna have a really important role to play. So I do think that that's an area to watch really closely. So that's a really big thing. And again, this distinction that I mentioned between when it comes to China, and I write extensively about this in the book, right? I think that's an area to watch. Jeff (47:46) Yeah, absolutely. Yep. Mm-hmm. Mm-hmm. Right. All right, great. Well, it's been. A pleasure once again having a conversation. had a great conversation last week and I always enjoy it. I will let you go. But before I do though, I do want to just say to our listeners, Alex has been wonderful. He has just written an amazing book. I highly recommend that you go out and get it. Technonationalism, Alex Capri. I think you'll find it fascinating. It'll help you really understand how to navigate the world we're in today. And Alex, really thank you so much for joining me and for just an excellent conversation. Alex Capri (48:10) Yes. Me too. Jeff (48:36) conversation. Yeah. Alex Capri (48:37) Thank you, Jeff. I really enjoyed it. Thank you.