Ep. 166: The global economy: Tariffs, industrial policy, and a fraying order

In Darren’s own research, topics like tariffs, industrial policy and the decaying rules-based economic order are a daily focus. On these issues and many more relating to the global economy, financial markets, economic security, and US-China geoeconomic rivalry, there is no-one whose expertise and judgment Darren respects more than that of Brad Setser, today’s guest. In a conversation recorded on 1 September, three big themes are canvassed: (i) tariffs, (ii) China, and (iii) Australia’s position in a fraying economic order. As the hosts of the “Odd Lots” podcast would say, Brad is the ‘perfect’ guest, and Darren could not be more thrilled. What is motivating Trump, and what could constrain him? Which country has negotiated the best deal? Is China’s export-driven economic model locked in? Could other countries rein in Beijing’s overcapacity? Is the rules-based economic order finished?

Brad Setser is the Whitney Shepardson senior fellow at the Council on Foreign Relations. His expertise includes global trade and capital flows, financial vulnerability analysis, and sovereign debt restructuring. Bred served as a senior advisor to the United States Trade Representative from 2021 to 2022 and as the deputy assistant secretary for international economic analysis in the U.S. Treasury from 2011 to 2015.

Australia in the World is written, hosted, and produced by Darren Lim, with research and editing this episode by Hannah Nelson and theme music composed by Rory Stenning.

Relevant links

Brad Setser (bio): https://www.cfr.org/expert/brad-w-setser

Odd Lots (podcast), "Liz Truss on the 'Doom Loop' Engulfing the UK Economy", 29 August 2025: https://www.youtube.com/watch?v=yyQOEJ38kW8

Jonathon Sine, “Litigation Nation, Engineering Empire: A review of Dan Wang's new book Breakneck”, Cogitations (substack), 28 August 2025: https://www.cogitations.co/p/litigation-nation-engineering-empire

Bob Davis and Lingling Wei, Superpower Showdown: How the Battle between Trump and Xi Threatens a New Cold War (Harper Collins, 2020): https://www.harpercollins.com.au/9780062953070/superpower-showdown/

Mark Kurlansky, Salt: A world history (Penguin, 2003): https://www.harpercollins.com.au/9780062953070/superpower-showdown/