Trump turnaround realigns geopolitical world order: Sedwill
After working under Boris Johnson and Theresa May, Lord Mark Sedwill is now laying bare the new geopolitical world order to Australian investors and corporates.
Former UK national security adviser Lord Mark Sedwill once described the end of Donald Trump’s first term as a “disgraceful period”, describing the relief that swept through Western capitals on Joe Biden’s appointment as president.
Four years on, he’s the first to admit Trump 2.0 is a much sharper, well organised proposition.
“He had some big ideas but he didn’t really have an agenda and a program. And he wasn’t well prepared for government,” Sedwill said of Trump’s maiden administration.
“It’s completely different this time around. He’s very well prepared and this use of executive orders to impose tariffs and drive his agenda was all pretty much ready to go. You can argue about the merits of the policy … but he has been successful so far in driving his policy agenda.”
Lord Sedwill, now a senior adviser to investment bank Rothschild, was in Australia last week meeting dozens of investors and clients to deliver his assessment of a bewildering array of geopolitical tensions testing the global economy.
Corporates have quizzed Sedwill for his expert view on the endgame for the US-China tech war, Trump’s scattergun approach to foreign policy in the Middle East and Russia and how Australia can best navigate its deep links as a US ally while mending ties with Beijing.
With Sedwill, a former BAE Systems board member and adviser on the UK’s strategic defence review, uncertainty over the future of Australia’s AUKUS commitments and defence vulnerabilities also received airtime.
Rothschild, which is advising Santos on Abu Dhabi’s $30bn takeover, is headed up locally by Australia chief Marshall Baillieu and head of global advisory Alex Cartel.
Sedwill, who stepped down as Britain’s most senior civil servant in 2020 after reports of clashes with Prime Minister Boris Johnson’s top political adviser Dominic Cummings, said the reshaping of foreign policy under Trump during his second term had confounded his critics.
He points to his “pretty skilful” handling of the Israel-Iran crisis, with another blockbuster confrontation looming next weekend after Washington and Moscow agreed to hold a summit in a bid to end the Ukraine war.
“I was really concerned in Trump’s first few weeks with his approach on Ukraine. After that episode with Zelensky, it felt like there was a really significant risk of a sellout of Ukraine. He now appears to have shifted his position on that and become very frustrated that Putin isn’t serious about any peace settlement and he’s now reacting to that approach.”
While Trump can point to a string of policy wins, Sedwill said the President’s approach to effecting change had proved damaging.
“There are elements of his approach which are deeply worrisome in the US system particularly the dismantling of checks and balances and the approach to the power of the presidency and the disregard of elements of government,” Sedwill tells The Australian.
Washington’s push to reorder world trade with a jigsaw of tough tariff rules was creating fresh uncertainty in the world’s biggest economy but Sedwill says the bigger issue is Trump’s big beautiful bill which legislates tax cuts and changes to social security.
“It’s essentially fuelling what was already a massive structural deficit in the US, which can only be funded in the bond market. And the two biggest holders of US Treasuries are Japan and China, which has actually been unwinding its position in the last few years quietly.”
He points to bond markets “being spooked” on the Liberation Day tariffs which ultimately led to a U-turn.
“In the end I watch the bond market more carefully than I watch the stock market because there is a risk of a potential crisis in the bond market.”
Sedwill was also quizzed on national security threats linked to Chinese artificial intelligence app DeepSeek, which triggered a sharemarket bloodbath in January amid fears the US’s AI dominance could be under threat.
“Deep Seek was a wake up call that took most Western governments and businesses by surprise,” he says. “We simply can’t assume that the Chinese are, as they have in the past, relying upon the transfer, or in many cases, the theft, of Western IP in order to progress. They’re capable now of generating their own – and so it’s now a real race. The race is undoubtedly on.”
Despite ongoing concern over how Anthony Albanese best positions itself between the two major world powers, Sedwill says Australia was treading a sensible path.
“If you had offered Australia the position you’re in right now on January 20, it probably would have pocketed it and walked to the next tee. Clearly Albanese had a productive visit to China and there hasn’t been pushback from the Americans and your tariff position is pretty much the same as the UK, at least for now.”
He points to Canada as a lesson of how relations can quickly turn sour, even between major trading nations.
“We’re all trying to balance this tension between maintaining a strong relationship with the US and also a good, productive one with China.”
A US stopover by Taiwan’s president was cancelled in late July, with talk in Washington pointing to Trump visiting Beijing for a meeting with President Xi Jinping and potentially a trade deal with China to follow.
“He would like a deal to stabilise that relationship. So for Australia to be in this position is not particularly out of line with where President Trump is, even though of course there are some more hawkish voices.”
A live review of the AUKUS defence deal by Pentagon policy chief Elbridge Colby remains a pressure point but Sedwill does not expect wholesale changes.
“It’s difficult to read the tea leaves. But there’s none of the mood music coming out of the White House at least – and even out of the Pentagon – suggesting there is going to be a major revision. There may be, given the politics of this, some changes at the margin. But I think there is a pretty bipartisan consensus that this is good for the US and good for its allies.”
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Originally published as Trump turnaround realigns geopolitical world order: Sedwill
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