A Conversation With Mike Froman

CFR President Mike Froman discusses his career, priorities for the Council, and the current events affecting U.S. foreign policy.

The CFR Young Professionals Briefing Series provides an opportunity for those early in their careers to engage with CFR. The briefings feature remarks by experts on critical global issues and lessons learned in their careers. These events are intended for individuals who have completed their undergraduate studies and have not yet reached the age of thirty to be eligible to apply for CFR term membership.
 

SINGH: Welcome to today’s Council on Foreign Relations Young Professionals Briefing with Michael Froman. I’m Dhruv Singh, managing partner of DEWS Holdings and CFR term member, and I’ll be presiding over today’s discussion.

First off, let me share a little bit about Mike. Ambassador Michael Froman was—is president of the Council on Foreign Relations. He served in the Obama Cabinet as U.S. trade representative from 2013 to 2017, where he led the Trans-Pacific Partnership to conclusion and advanced agreements at the WTO. And earlier he was deputy national security advisor for international economic affairs, coordinating U.S. policy on trade, finance, energy, climate, and development, and serving as the U.S. sherpa for the G-20 and G-8. Before returning to public service, he held senior roles at MasterCard and Citi.

Earlier in his career, he served at Treasury and the White House. He’s published widely on globalization and U.S. strategy, and recently on what comes after the trade war, how China remade the economic order, the path to peace in Ukraine—a bunch of topics. Excited for us to cover some of them today. Please join me in welcoming Mike, who brings a vantage point that very few people share on how we lead, how we compete, how we govern, and positively impact the world. So please join me in welcoming Mike. (Applause.)

So, Mike, it’s a true privilege to be here with you today. I have to tell you, this is actually my third interview of the day. I led—

FROMAN: I’m glad I made the top five, honestly. (Laughter.)

SINGH: I led the first day of school interviews for two of my children, our three-year-old and five-year-old, Serena and Emilia. And, I have to say, it’s a real relief talking to someone who can actually reliably answer the questions which I’m going to ask. Before we dive into your career and lessons learned from it for us all to benefit from and current affairs, a little about CFR. You’ve spoken so much about CFR’s responsibility to identify, develop, promote the next generation of foreign policy experts. Why is this so important to you? And how will CFR achieve this?

FROMAN: Well, first of all, thank you. And thank you for doing this. And thank everybody for coming. I’ve been looking forward to this.

Look, I think every generation has a responsibility to try and bring up the next generation, to mentor and identify and promote. And I think for the Council, it’s institutionalized. We have it in the Term Membership Program. We have it in how we think about our staff, our research associates, our interns, our young staff, our junior staff. We want them to view the Council as a place they can come, get trained, get exposure, and then move on and play a role in the foreign policy community, if they—if they so choose. And I think the Young Professionals Program is a relatively new addition to this, and is highly valued for that purpose.

The foreign policy community can be, or historically has been, quite a tight knit, often is creating opportunities to bring in next generation of diverse foreign policy expertise from non-traditional sources, from a wide range of schools, a wide range of geographies, a wide range of ideological perspectives, is really absolutely critical to having a better foreign policy. And so you have the same people who, generation after generation, are there making policy, you’re not likely to see much change. The world is changing a lot. So it’s important to see the next generation come up.

And I’ve been sitting in the seats that you’ve all been sitting in. So I’ve benefited enormously from it myself. And so I very much want to make sure that institutionally we’re doing everything we can to pay that back.

SINGH: I love what you said there. You know, part of the bio I mentioned a moment ago. You’re an incredibly rare, you know, tri-varsity athlete. You know, spanning the three big sectors, right? Academia, non-profit, private sector and, of course, public sector. And, you know, I imagine there’s not a clubhouse for people of your caliber, because there wouldn’t be enough of you, but there’s got to be some secret handshake or something. And, you know, I think, given—you’ve mentioned that Robert Rubin played a critical role in your transition to the private sector. I’m sure you also know of many other stories and routes people have taken. How do you think a young professional could replicably think about moving from one sector to another? And, you know, if anyone’s read my pretty one-dimensional bio, you can—I’m just asking for a friend. (Laughter.)

FROMAN: Well, first of all, I think—this won’t be a very helpful answer—I don’t think it’s something you can actually plan for. I certainly didn’t plan for it. My plan had been grad school, doctorate. I got a law degree. I went into government. The plan was work in government for two years, working in a law firm for two years, become a law professor. Clearly, that didn’t happen, because my two years in government turned into seven years. I worked closely with Bob Rubin at the White House and then treasury secretary. Had never really thought about going to the private sector before. But when he left as treasury secretary, I also left and went with him to the private sector, and had a great time, and had a great experience, and really enjoyed that sector as well. Went back in the government, back into the private sector. And when this opportunity came up, I’ve been associated with the Council in various ways over the years—as a term member, as a visiting fellow, twice.

And when this job opened up to go into the nonprofit sector, I think it was just a great opportunity to take the skills that you pick up in one sector or another and try and bring them to a third sector. And there’s a lot more similarities, I think, than people realize. People like to think about government, private sector, nonprofit sector as very distinct communities. But, you know, what I always tell people who—particularly people leaving government and trying to sell themselves to the private sector—what you learn in institutions is how to manage across complex organizations, siloed organizations. How to build a consensus on a wide variety of people. How to manage vast amounts of information and boil it down to its essential hub, and so that a busy policymaker—whether it’s your boss or whether it’s the president of the United States—can read it and make a decision based on your memo, on your analysis. And how to make sure that you take strategy and understand how to implement, how to keep what’s both urgent and important top of mind, and measure yourself. Have metrics. And ensure that you’re having impact.

And that’s true in government. It’s true in the private sector. The metrics may be different, some may be more quantitative than others, some may be more financial than others. But being able to take those skills from one sector to another makes you, I think, a better manager or a better athlete. Very few people call me an athlete. (Laughter.) I’m not really athletic, but in that regard.

SINGH: I love the specificity of your answer there, the managing, building consensus, distilling information. And the opportunistic approach that you recommend. Could you tell us about a time in your twenties or thirties where you felt like you were over your skis? You know, you felt lost. And, you know, I’m clinging to my thirties by my fingernails at this moment, as the new decade’s soon to arrive. But, you know, when you hit an issue at our age, especially, as I recall, in my twenties, it’s so easy to get lost because you don’t have a trajectory. You don’t have a track record. You’re trying to figure things out. And you don’t have a vision either, because you don’t know enough to have, like, full clarity and confidence. Could you tell us a bit about a time when you felt lost? And then you reference the Steve Jobs quote where, you know, the dots connect only looking backwards; just trust will. Speaking then from today’s vantage point, how do those issues resolve themselves? And where did clarity emerge?

FROMAN: Yeah. I don’t know whether I have a great answer for you, because, you know, I think these issues come up, these obstacles come up. You work your way through them the best you can. And sometimes you realize you are over your skis and, you know, you’ve made a mistake. Sometimes it’s a serious mistake. And the question is not to be paralyzed by it, but to learn from it, and take those lessons, and figure out how to move on. I think it’s just—it’s really important to move with humility. You can’t know everything. And you’re not always right. And so, one, you know, being able to tell your boss, I just don’t know the answer to that. I’ll go try and figure it out. I’ll try to find it. But not to fake it. I say that by—because, I think, at times the temptation is kind of fake it till you make it.

And I think the downside is that if people are relying on you to make important policy decisions, you can’t really afford to do that. So much better to say there’s uncertainty. You know, it could be this, could be that, maybe it’s sixty/forty. You know, I had various bosses—Bob Rubin was one, Larry Summers with another—here they would—they would really try and force you to boil things down to a probability, you know? You know—(inaudible)—OK, you know, how serious—how sure are you of this? And it’s OK not to be sure. But it’s important for a policymaker or a decision-maker to know it’s fifty-one/forty-nine or it’s eighty/twenty, and being able to develop those judgments and convey that, and be OK not knowing for sure what the right answer is. Learn from when you’ve made mistakes, I think, is—(inaudible).

SINGH: Love that. Would love to move to current events. You wrote a wonderful piece just regarding—

FROMAN: This is really good for my ego. Keep going. (Laughs.)

SINGH: Yeah, right? So I’ll give us the piece. The piece was on—it had a very kind of sharp statement, which was the multilateral global trading system is dead. And what I liked about it was that it’s a bold claim; it’s definitive; and, obviously, given your background, it’s—(inaudible)—right? And you walk—you were speaking that plurilateralism is the second best option in the scenarios you see here. And how will this work with us, around us, despite us? And, you know, if the rules are dead today what are the new top three rules?

FROMAN: So the piece you’re referring to is in Foreign Affairs. It came out a couple weeks ago. And it’s really—it’s called, “After the Trade War.” And it’s about how the Trump administration may have put the final nail in the coffin, but the multilateral trading system has been under stress for a long time. It’s been under stress, in part, because historically China sort of played by its own set of rules, and now the U.S. is playing by its own set of rules. We have the two largest economies of the world not abiding by the main rules of the system but doing their own thing. You have to ask the question, what’s left of it? What’s left of the system?

There’ll be lip service paid to it by a lot of countries. Small countries in particular may be hurt because they’re the ones who benefit most from having a multilateral rules-based system. But the large countries, they’re going to go out and craft their own way going forward. And I had suggested that, rather than us trying to lament the death of the World Trade Organization or multilateral system, to figure out where we can come together with other likeminded countries around specific issues and create new sets of rules, like the new reality. And for some countries, that may mean opening up their economies to trade. Not every country is as protectionist and anti-free trade as the United States has become.

So the European Union’s continued to sign trade agreements. Africa has signed a continental-wide free trade agreement. A lot of free trade talk going on in parts of Asia. That may well continue. For others, like the United States, it may be about how to restrict trade, export controls. You know, how to prevent technologies—(off mic)—competitors or our adversaries for particular purposes. It could be about how to restrict foreign investment; you know, where do we want foreign investment to come into our country and where do we want foreign investment excluded? Could be about industrial policy and having rules around subsidization so that we don’t sort of undermine each other’s economies.

So there’s a lot of different ways you could do it. But I think coming up with what we call a plurilateral system, which means just many countries, not all countries, coming together around a set of issues, and seeing if they can make sure that some rules survive the end of the—(inaudible)—system. None of us want full anarchy. None of us want chaos. And I think that—(inaudible)—economies go their own way, every other economy will then imitate us. And if every economy becomes protectionist, looks inward, it becomes a much slower-growth world, a much more dangerous world, because we’ve seen what happens when countries do their own thing and trade becomes a weapon. It’s what we had before the Second World War. And so we want to make sure we preserve rules where they can be preserved or recreated, at least among countries that are ready and willing to live by them.

SINGH: And what do you see as the driving forces which result in some groups clustering and finding affinity with each other, but then others having—(inaudible)? Obviously the easy answer is just direct opposition and competition between the countries for reasons, but are there other attributes that may not be as obvious?

FROMAN: I think the challenge is figuring out where the common interest is. For decades, the U.S. defined its national interest as sort of enlightened national interest, that we had an interest in providing certain global public goods, because it was important to us. It was in our interest that poverty was alleviated in developing countries around the world, that there was a global health infrastructure that delivered health services around the world, that there was a non-proliferation system that prevented countries from getting nuclear weapons. That these were all in our interests, and so we were willing to support that. Now the question is, are we revisiting what our interests are? And if so, how do we want to go about achieving them?

SINGH: So, speaking of revisiting interests and relationships, I was as excited to ask about—you know, I think this—what a sharp turn. You know, I think most people would agree that it’s hard for us, as the U.S., to prevent a great power from rising. One can make an argument that we can perhaps choose, or at a minimum influence, who becomes a great power in Asia. And we’re about a week since 50 percent tariffs took full effect. Prime Minister Modi went to go visit President Xi this past weekend, his first trip there in seven years by the way. And, you know, the—one assumes they were choreographed—but the seemingly choreographed images—

FROMAN: It seemed very natural for the three of them to hold hands and walk down the street. (Laughter.)

SINGH: In Tianjin, exactly, right? A warm embrace between—I mean, for those that may not have seen, between Putin and Xi. You know, what counsel would you offer Washington and Delhi—and that’s within near-term time horizon—just to arrest the slide in this deterioration? And then looking to this audience here, on a longer time horizon, what advice—(off mic)—professionals looking to position themselves in thoughtful places, as you look more on the time horizon of decades of how this relationship could evolve?

FROMAN: So, first, I think people have taken for granted that U.S. and India had a good and strong relationship. It wasn’t that long ago, twenty-five, thirty years ago, when India really was positioning itself as the chief of the Non-Aligned Movement, and quite anti-American. And over the course of several administrations, beginning with the Clinton administration, very much in the George W. Bush administration where a very important nuclear deal was signed between the U.S. and India, and continuing during the Obama administration, the relationship has fundamentally shifted. India is not a U.S. ally. We’re not in that kind of relationship where they—like with Europe, where they may follow our lead on a whole range of issues, security purposes or other purposes. But it was a much warmer, much more areas of cooperation. There was technology, military and defense, economic, or the like.

But it’s taken a long time and a lot of patience across Republican and Democratic—(off mic). I think the concern now is that our interests haven’t necessarily changed as a country, but now have this tension between President Trump and Prime Minister Modi, whatever the causes of it are, that I think have set back the relationship quite significantly, potentially. Because India is a very proud country. It has always said that its relationship with Pakistan is not to be—(inaudible)—by another. Or it got very offended by the president asserting that he had been the one to create a peace agreement or a ceasefire between the two of them. Have no idea what the actual facts are and the nature of the conversation of the three countries, but clearly that rubbed India the wrong way. You saw the reaction to it, and we saw now President Trump’s counter reaction—to raise tariffs.

We do need to get this relationship back on a constructive track, not just because of the U.S.-China competition, it plays a role in it, but just because India, qua India, is an incredibly important country. It is the most populous country in the world. It’s going to be the most populous country in the world. We have incredible ties between the Indian public and the American public, the business communities. So much of our innovation here, entrepreneurs here, comes from Indians who have emigrated to the United States. And so there’s just so many things that could bind us together. And I’m hopeful that this blip is just that, that over time—it will take more time, I think, than people expect—we can get back on a firm footing.

And I think that a lot of that, as you said, is going to come to the next generation. This generation probably can’t, you know, believe that anything other than strong U.S.-India relations existed because it’s the way it’s been for the last twenty-five years. But it hasn’t always been that way. And we need to nurture that relationship if it’s going to stay that way.

SINGH: Hmm.

Switching over to intel, you know, this is a really, really hairy problem: chips race, boundary economics, intel and U.S. government relations. You know, clear laggard now. Taiwan, just physically being extraordinarily close to China. Talk us through the factors, possible options, the tradeoffs. And if it were your decision, you know, how would you have handled the circumstances?

FROMAN: So, first, I do think we, and much of the world, became overly complacent about where our supply chains were cited—you know, mostly in terms of our dependence on China, the manufacturing floor for the global economy, but when it came to semiconductors our dependence on Taiwan. And so the effort to rebuild the semiconductor industry in the United States, even if it would only achieve 15 or 20 percent of what we needed for our economy, I think is a good move. I think the CHIPS and Science Act was a good step in that direction. And I think we’ve seen a lot of really positive development putting the hundreds of billions of dollars of investment that are now pouring into the United States from Taiwan, from other countries, Arizona, upstate New York, Ohio, et cetera.

You know, having said that, it’s a complex process, right? It’s the whole ecosystem that has developed in Taiwan that’s going to take time replicating on a smaller scale here in the United States. And there will be some successes and some challenges.

SINGH: And trust for demand, right? It’s really hard to be the first person in line to say, I don’t know if this is going to work or, you know—

FROMAN: No, that’s right. That’s right. Now, to take a stake in a company is sort of an interesting step. On one hand, it seems actually quite reasonable. And, by the way, it’s not unprecedented when we went through the financial crisis and the government bailed out—(off mic)—owning some or owning a stake in others, and then ultimately selling them or privatizing them. So it’s not completely unprecedented. Question is, what are we going to do with that stake? And, you know, we’ve found over the years, the last twenty-plus years, we’ve been trying to press China not to be protectionist, not to engage in industrial policy, not to interfere with private firms.

And now we’re protectionist, we’re restricting foreign investment, we’re engaging in industrial policy. And most recently, we’re now taking stakes in private firms. So that’s a subject of another article I wrote last year, which is rather than us becoming—rather than China becoming more like us, which is what we all assumed would happen when they joined the global economy, we’ve become more like China. We’re now competing with China, in many respects, on China’s terms, on the rules that China has set. The question is, can we compete with China on their playing ground as well as they can? The answer is no.

SINGH: I’d love to shift to have a little bit more discussion on CFR, and your vision for CFR. If CFR is successful in its mission, what are the outcomes that CFR has achieved in 2035? And would love—you know, are their national statistics that we’ve impacted? To what degree? And, you know, what CFR initiatives do you think got us there?

FROMAN: So, first of all, I think we have multiple audiences that we try to serve. One audience is certainly the policymaker. So the executive, Congress, international organizations, the broad policy community of Washington and elsewhere. And, I think, over the years our work has been to try to provide content and analysis, independent research, non-partisan, to help administrations and Congress do their jobs. That is our—that is our goal. And I think about impact there in a few different ways. One is coming up with very specific policy recommendations that a government adopts or implements. But that’s not the only way. If we help define the dimension of the debate—think about two-state solution, where, you know, CFR.org, you know, some of the work that our fellows have done, I think we have really helped define the debate over that issue. That has impact. If I go to a conference and every session cites a Foreign Affairs article that has—you know, as their source, that we are effective.

It’s also setting the agenda. So you can have an impact on a particular policy. You can set the debate. Or you can help define the agenda. That means bringing new issues to the table. And so then we will begin discussing them, they become part of the bloodstream of the policymaking. And we do that as well in a number of respects. So that’s for the policymaking audience, and in terms of where we could have impact. And it’s it comes largely out of our studies, our eighty fellows who are experts in their areas. But it’s also in our digital platform. It’s upon the pages of Foreign Affairs. It’s in our convenings as well.

The other mission we have is really the focus beyond Washington, New York, et cetera, the rest of the country and the rest of the world. And there we have networks of legislators, local journalists, local and state officials, who we have cultivated over the years, giving them exposure to CFR expertise to help them in their jobs, help them understand what’s going on in the world, get their input on some of these issues. And those are all leverage points for helping to shape America’s public understanding. And then we go to the public directly, whether—again, whether it’s Foreign Affairs, which has a particularly sophisticated audience of people who are interested in international relations, or CFR.org and our podcasts and our short-form video, and all the work that our fellows do and our other experts do online. It’s really about helping to equip the American public with the tools they need to understand the tradeoffs on various policies.

And the last thing I would mention is our education effort. And that’s really about coming up with materials for educators at the high school and the college level to help them teach these issues as well, leveraging the CFR content. So success in 2035 means success across all of these dimensions. It’s a more educated public in all of these dimensions. It’s being helpful to government in its policymaking. (Off mic)—U.S. engagement with world. So it’s all around what should the role of the U.S. be in the world and how do we make sure we’re achieving U.S. national interest in that—(off mic)?

SINGH: Thank you.

With that, at this time I’d like to invite participants to join our conversation with their—(off mic). This meeting is on the record. And please remember, questions, not statements, please. And thank you in advance for brevity, because I know we’re going to have a lot of questions, a lot of people in the room here, as well as online. And for that reason, please also keep it to one question.

FROMAN: There’s a microphone coming.

Q: Thanks so much. And thank you, Ambassador—(off mic).

I’m curious a little bit about—you know, you talked a little bit about—

FROMAN: CFR style is you have to stand up—

Q: Oh, my apologies.

FROMAN: —tell us your name, where you work or where you’re from.

Q: First time here. Thank you for telling me. My name is Ransom Miller. I’m with the Institute for Global Affairs at Eurasia Group. Pleasure to be here.

I wanted to ask about CFR and the foreign policy community’s role in the age of MAGA and American first policy. You know, there’s been a lot of articles in recent weeks about Steve Witkoff, and maybe not having so much experience making foreign policy, but maybe having some success some failure. Depends on who you ask. I’m curious a little bit, what do you think the role of foreign policy expertise is in an age of unconventional diplomacy?

FROMAN: Yeah. So, first of all, I think, as I said, our mission is to help inform U.S. engagement with the world. There’s lots of ways to engage the world. And I’m in that camp that believes that President Trump is not an isolationist. Hard to be an isolationist and call for the acquisition of Greenland, Canada, and Panama. (Laughter.) You’re an expansionist. He is certainly, whether it’s the global trading system, the alliance system, how we deal with adversaries, any number—or any number of other issues. And so, you know, our hope and our mission is to provide the kind of expertise that will help the U.S. engage in the world, however it chooses to engage. And we have ongoing dialogue, you know, most of which we don’t talk about, but we try and be helpful wherever we can on particular issues. And we try and be very active publicly in laying out different views, because it will get read by people, or the people will hear about it, and hopefully at times get phone calls sort of asking for further information about this or that.

And so I think we still have a role for expertise. I also think that that second mission I mentioned, beyond the policymakers with the broader American public, I think in this moment in time in particular there’s real value placed on nonpartisan, independent, fact-based research. There’s more demand for our product than we’ve ever seen before, in part because there’s so much noise in the system. People want to understand, well, what’s actually true? And who can we trust to tell us what the facts are? One thing we’re trying to do is we don’t take any institutional positions on issues. CFR does not have an institutional position. (Off mic)—what they want to write. They have freedom of speech. Some will be very supportive of the president. Others will be critical of the president. That’s all fine.

Our job as an institution, I think, is to lay out, again, based on facts and analysis, the tradeoffs involved. If the president says this is the tariff policy we’re pursuing, then our job is to say, all right. If that’s—her are his objectives. If this is how he’s going about trying to achieve his objectives, what do you have to believe is true for that to happen? Going down that path, going down another path. And laying that out so that, whether it’s policymakers, opinion leaders, or the American public, can look at those tradeoffs and say, OK, well, I’m in that camp, or I’m comfortable with that tradeoff, or I’m not comfortable with that tradeoff. And that’s how I think we try and, you know, take our expertise and make it relevant to this moment.

The other thing I would say is, just as an institution, we’re actively involved in an effort we’re calling meeting the moment, while a lot of institutions are doing similar sort of exercises. This is a moment—(off mic)—when the Council was founded after the defeat of the League of Nations after the First World War, to try to—to deal with the issues of isolationism. It’s not unlike 1948, when in this building, you know, we sort of crafted the NATO—the notion of NATO—(off mic)—1991, at the end of the Cold War, when we brought together economics and geopolitics, sort of talked about a concept of geoeconomics.

This is another such inflection point, I think, in American foreign policy, because the president has reopened a lot of questions that people thought had long been resolved. And our job is to say, OK, let’s take these questions seriously. Let’s talk about the pros and cons of the different approaches to it, again the tradeoffs involved, and help policymakers, opinion leaders, and the American public—(off mic).

Q: Hi. I’m Riley Callanan. I’m also from Eurasia Group. I’m a reporter for GZERO.

FROMAN: Is everybody here from Eurasia Group? (Laughter.)

Q: (You fed us all ?).

My question is, what do you think will be a—or is there anything that you think will be a defining issue in international affairs for our generation, that isn’t being given enough attention right now?

FROMAN: Great question. Well, first, I think an obvious one right now is climate change. (Off mic)—issue many people would expect, but I think that’s one that will require this. A lot of the transnational issues, whether it’s climate change, global health and pandemics, transnational crime, those are all issues that require international cooperation at a time when the mechanisms, institutions of international cooperation are particularly weak. So I think those kinds of issues will be front and center.

Then there are—you know, I’ll just throw in two more. We can go on for a long list. But I’d say, one that it’s hard to do anything about, is demographics and the changing demographics around the world. China will be about half the size in population than it is now. India will be the largest country, probably followed by Nigeria. Immigration policy, you know, may grow somewhat. Europe, Japan likely to shrink. And so, you know, how does that affect the balance of power between countries, the nature of it?

Then the one that you all are much better at assessing than I am, than we are, is technology. And we are only beginning to—I’m sure every generation says this—we’re only beginning to see the impacts of recent technological developments. We’re only speculating about how significant they will be, and the costs, the pros and cons of those as well, the tradeoffs involved. But I’d imagine that’s going to be a very significant source of—(inaudible).

SINGH: This one over here.

Q: There we go. My question is—

FROMAN: Do you want to work at the Eurasia Group, or? (Laughter.)

Q: No comment. (Laughter.)

So my question is about growth and development strategies. Right now, export-oriented growth strategies from Germany to China to Vietnam to Eswatini and Lesotho are under increasing stress. What paradigms do you think will replace the export-oriented growth and economic strategies of a country like Germany or of a country like Vietnam if that pressure is maintained and perhaps increased over the years to come?

FROMAN: Yeah. So, first, I think it’s hard to come up with one strategy that’s appropriate for all of them.

But for a lot of countries, including China, and maybe over time Vietnam, certainly Germany, moving towards a more domestic demand-led, consumer-led growth strategy, balance the—you said the traditional export-led growth strategy, I think is probably what lies ahead for them. (Inaudible)—be under pressure. So I think we’d sort of see it there. I’m not sure, you know, Lesotho or Eswatini have the same opportunity as Germany, or China, or Vietnam that regard. But I think it’s really quite urgent for countries like China in particular, maybe Germany to a certain extent, take on those issues, something we’ve been pressing China for for twenty years without much success.

It’s possible—China has benefited so much over the last couple decades from the benign international environment to allow them to export their way towards middle-income status. And if that benign international environment’s gone—the U.S. market’s closed; Europe becomes more protectionist; other countries, India, Brazil, they’re all very much worried about the flood of Chinese imports—they may finally have to deal with some of these issues around social safety net reform, domestic demand growth that they have known for some time would be a healthier way to grow.

SINGH: I’ll take a question from virtual.

OPERATOR: We’ll take our next question from Vincient Arnold.

Q: Hi, yes, I’m Vincient Arnold. I’m at the Yale Jackson School of Global Affairs and the Bretton Woods Committee.

Earlier you expressed some views on the global multilateral trading system. I’m curious to hear your views on the international monetary system, and particularly sort of the global dollar system, and whether or not you think that will survive in its current form sort of this era of multipolarity.

FROMAN: Great question. Look, I think people’s worry about the end of the dollar and the role of the dollar, I think, are probably quite premature. Probably the resilience of our economy is such that I think we’ll continue to be a place that people want to put their incremental investment. Even if they’re slightly rebalancing now, I think over time the U.S. continues to be the most dynamic, innovative, market-oriented, rules-based, rule-of-law country out there. And we have these incredible strengths, including our deep capital markets, the existence of risk capital, our still strong university system, our research development capacity—all of which I think make this the place that most entrepreneurs around the world want to build their next company. And so I think that will likely remain the case.

I think also, you know, we’re the—we’re the—that doesn’t mean we don’t have serious issues, including our fiscal situation, debt, our deficits, and a lot of the things we’ve done to ourselves by the weaponization of finance that have made the dollar less attractive as the central reserve asset that it might otherwise be. But we benefit from the fact that we’re the prettiest house on an ugly block. And there isn’t anybody else at the moment. And for all the talk about a BRICS currency or the internationalization of renminbi, there’s nowhere near the kind of alternative to the U.S. that would be necessary for the dollar to really lose its central role. It doesn’t mean there won’t be challenges at the margins, right? Whether it’s payment systems that will be done and in—or settling for trade that might be done outside the dollar. Whether it’s people rebalancing their portfolios and putting their incremental euro or—their incremental investment in euros, or yen, or something else. But I think the dollar is likely to remain—if we don’t do too many self-inflicted wounds—likely to remain the central reserve currency of the world for some time.

SINGH: And a quick follow up to this. You had a very interesting discussion with Robert Lighthizer. And, you know, curious to get your position on—obviously, people talk about the exorbitant privilege that comes with us controlling the currency that is the standard. What’s your perspective on the cost side? You know, it’s very easy to talk about the positive side. And obviously, Bob Lighthizer’s view is that there are many costs. Do you think if the dollar were to diminish in importance, to what extent is that a horribly bad thing for the United States, in your opinion, versus there’s puts and takes?

FROMAN: Well, I mean, there’s certainly puts and takes. I think, yeah, on one hand, being the central reserve currency allows us to borrow at incredibly cheap rates and allows us to live, frankly, way beyond our means as a national economy. And it would be very costly not to have that. You know, I think the argument of those who worry about the exorbitant privilege is that it creates an artificial strength to the dollar, which hurts our exports, or manufacturing exports. We’ve seen the dollar decline in value about 10 percent or so, so far this year.

I haven’t seen the export figures necessarily go up that significantly from our manufacturing sector. I think there are a lot of other ways of ensuring that we are competitive export of manufacturing product other than weakening the dollar, which then also tends to lead to higher inflation, higher rates, and the like. And so I think it is of value to us to retain the dollar as a reserve currency. We probably need to do things like deal with our debt issues and our deficit issues if we’re going to do that, and be more disciplined about how we use dollar-based institutions as a tool of foreign policy—(inaudible).

Q: My name is Abe Baker-Butler. I’m a research fellow for Zeke Emanuel at University of Pennsylvania.

And my question is, I’ve seen some headlines in the past few days about the Trump administration potentially attacking cartels in Venezuela or Mexico. I’m interested in what you think we’re about to see in terms of developments over the next year in Latin America.

FROMAN: Great question. Not an area I’m a huge expert in. But clearly this administration has a really interesting, occasionally nineteenth-century, perspective on international relations—(laughter)—in terms of spheres of influence. Some of the discussion around Ukraine has really been, we’re going to leave Eurasia to the Russians and the Europeans to sort through. It’s their problem. It’s their security issue. We’ll be in the background, if at all. We’re going to focus on the Western Hemisphere—Greenland, where we just had a CFR trip to Greenland earlier this month, or last month. Fascinating. I don’t think we need to buy it or invade it. (Laughter.) They’re very happy to work with us. But Greenland, Canada, Panama, and now we have gunboats off of Venezuela, and various actions being taken.

So clearly, this administration views the Western Hemisphere, you know, consistent with the Monroe Doctrine, as sort of our backyard, that this is our natural sphere of influence. And my guess is, you know, I remember—a lot of my Latin American friends would always complain, how come you guys never pay attention to Latin America? I would warn them that looking back historically, when we paid attention to Latin America it didn’t usually turn out too well for the Latin Americans. (Laughter.) And so be careful what you wish for. And let’s see how this plays out now over the next few years.

By the way, the real question on the spheres of influence, it’s not so much Latin America or Eurasia, but what does it mean for Asia? Are we willing to say, OK, that’s China’s natural domain. We’re going to leave Asia to China. Or is the U.S. a Pacific power, and do we feel like it’s in our core national interest to maintain the sea lanes of communication, the democracy in Taiwan, et cetera, South China Sea, et cetera. And I think that’s still an open question in this administration. There seems to be debate on which policy action is taken as to whether we’re committed to being a Pacific power to balance, deter, and ultimately defeat China if they decide to take kinetic action against Taiwan. Or whether, you know, ultimately we’re going to focus on the Western Hemisphere, and leave—we’re going to leave Asia to China instead.

Q: Hi, Ambassador. Thank you for having us. My name is Daria. I do geopolitical analysis for M&C Saatchi World Services.

My question—

FROMAN: You should get a job with Eurasia Group. (Laughter.)

Q: It’s the hot thing. My question is around what should the U.S.’s next steps be in terms of foreign policy in the Middle East, thinking about the fact that traditional U.S. allies, particularly in Europe, are starting to diverge from the U.S.? Thinking specifically about the recognition of Palestine, and what that means for the U.S.’s global standing as kind of historically a leader of the moral foreign policy route, and potentially now falling behind its European allies in that sense.

FROMAN: Hmm. Look, it’s perhaps the most difficult issue, I think, on the foreign policy agenda. And, you know, we Americans tend to think, oh, if we just work hard enough we’re going to come up with a solution to every problem. And this may be one where there’s just no really good solution, least in the short or the medium term. Terrible attacks of October 7, the war in Gaza, the humanitarian crisis in Gaza. You know, it’s just a terrible situation that begs for a solution that seems beyond reach at the moment. In some respects, the two-state solution is the only solution that may make sense, but it’s also the one that seems farthest from the possibility and feasibility of the moment, politically and otherwise. And so the challenge is, what can we do to alleviate the suffering in Gaza, ensure Israel’s security, and try and create a more stable situation where a more permanent solution can be found?

It’s hard to underestimate—hard to overestimate how much the Middle East has changed since October 7. The security situation, whether it’s the destruction of Hamas as military force, the destruction of Hezbollah, the fall of Syria, the weakening of the Houthis, the bombing of the Iranian nuclear program, I’d say, and the rise—very importantly, the rise of the gulf, of a set of powers that are not only important regionally, but globally. It’s just a—you know, back in the—back in the days when there was a problem in the Middle East, the two Arab countries you went to, to work on a solution, were Egypt and Syria. And they’re not irrelevant now, but now you go to UAE and Saudi Arabia, maybe Qatar. And so that’s just a fundamental shift in the nature of the region that the foreign policy community is still, I think, digesting. And we’re going to figure out what that means for U.S. interests, for regional stability, and ultimately, for solving issues like the Palestinian.

SINGH: One more virtual question.

OPERATOR: We’ll take our next question from Philip Balson.

Q: Hi. My name is Philip Balson with Palantir.

You talked about the risk that we have over-weaponized the dollar, and therefore destabilized or at least created some desire for alternatives to the U.S. dollar system. Given how important dollar sanctions and financial sanctions have been to U.S. policy on Russia, on Iran, on counterterror, on human rights, Global Magnitsky, to an extent even on China, are there specific places where you think we made the wrong trade off and you would not have done dollar sanctions in order to accomplish a foreign policy aim, due to the systemic risk?

FROMAN: Look, it’s a good question. But I think you put your finger on it when you used my favorite word, tradeoffs. Because, you know, I’ve been in meetings in government, you know, in the Situation Room, where you’re looking at the situation and the issue is, well, do we send troops or do we impose sanctions? And you almost always come out with the decision to impose sanctions because, of course, you don’t want to send troops. And so—if you can avoid it. And so it becomes, in the short run, an easy answer. The problem is, if you do that over and over again, as you said, people will try and find ways around it. And they’ll create systems where—that are sanctions proof. And I think that’s what we’re seeing now to a certain extent.

Again, we don’t want to overstate it, but when it comes to, for example, payment systems, a real effort to, I think, avoid the dollar-based payment systems so that if there’s sanctions you’re not cut off from the rest of the world. I think we have to be judicious about it, but it is a tool in the toolbox. And we just—we need to be aware that it’s not costless. That there are tradeoffs to it. And I don’t think those tradeoffs are always talked about and made explicit when policymakers are choosing among options. So I think, you know, whether it was in response to the Russian invasion of Ukraine—or, excuse me—Russian invasion of Crimea, or other actions, we just need to be very aware that actions do have consequences. And they will have longer-term costs, not all of which can be anticipated, but many of which can.

Q: Hi. Anthony Covington. I’m a new term member. I work at Microsoft. Thanks for this conversation.

So, since I work at Microsoft technology is very important to me. And I think technology is increasingly shaping economic, diplomatic, and foreign policy. From your perspective, what do you see institutions like CFR’s role in innovation, and how it either bridges the gap internationally and domestically, or widens it?

FROMAN: So we—it’s one of our—we launched four, sort of, strategic initiatives over the last couple years. One’s on China, one’s on economics, one’s on climate change, and the fourth one is on technology. And the angle that we’re taking on it is to look at the emerging technologies through a particular use case, which is the defense industrial base. So how do you integrate emerging technologies into war fighting and intelligence collection, and things of that sort, and sort of getting around—our head around AI, the implications of AI, through that mechanism, I think there’s tremendous opportunities. There obviously are risks.

You know, I think it’s likely—in terms of the inequality or the differentiation that you mentioned, I think we’re likely to be—it’s likely to enhance differentiation between us and other countries, that we have so much innovation going on here, also going on in China, that the leaders will become further ahead and the laggards will be further behind. And I think that’s going to be one of the challenges, is how do we make sure that some of the positive benefits, for example, of AI, are dispersed through developing countries, through Global South, for lack of a better term, for use in solving some of the big global common social issues, whether it’s global health or climate change or other issues, and not just for particular purposes in advanced industrialized countries.

Q: Hello. My name is Alden. This is my first time here at the speaker series.

I just had a question, sort of, from a writer’s perspective. Let’s say you were forecasting a future event or just analyzing the consequences of an event. Do you think it’s worthwhile to sort of dwell or spend time looking at—like, diagnosing the causes of why that event started? So I’ll give you an example. The war in Ukraine. There’s some debate as to why Russia chose to invade in 2022. Do you think it’s worthwhile to try to—you know, when you’re writing an article—to look at some of those causes and weigh, you know, the merits of each of them? Or just to focus on, you know, the consequences of that event and how they, you know, reshape the world system?

FROMAN: I think causes are important, yeah. I think going back and looking at the root causes, or the historic reasons that some on one side or another are looking, I think, is important. But then also not taking them at face value, but assessing whether those are legitimate, you know, reasons or not. Good luck with the paper. (Laughter.)

SINGH: Let’s have one final question.

FROMAN: Let’s go back there.

Q: Hi, there. Jordan Sandman, here from Co-Develop. We’re a fund that works on digital public infrastructure.

You’ve covered an incredible breadth of issues today. And I wanted to ask, as many of us are kind of earlier in our career and focusing very deeply on one topic, how you stay up-to-date on so many different things. (Laughter.) And how we could kind of, yeah, chart a course towards something more general.

FROMAN: Yeah. I’ve prided myself on being a professional dilettante, so never specializing in anything. But I have people like Sam Lazarus, who’s standing there, who’s my special assistant, who educates me weekly. And I don’t know if Michelle is on. Michelle Kurilla is my research assistant. So having smart people around you who can also help you digest information. And that’s one reason I mentioned that at the beginning in terms of skills. Being able to digest vast amounts of information and boiling it down is an incredibly important skill. And boiling it down in writing is an incredibly important skill, that would serve you well in government, in the private sector, certainly in jobs like these. Because there’s so much information out there. And being able to have a framework for understanding it and applying it in any particular instances is awfully critical. So I guess my advice is figure out that skill, and then surround your people—yourself with people like Sam and Michelle.

SINGH: Excellent.

FROMAN: How about one more? This gentleman had his hand up.

Q: I’m David. I’m a reporter for Barron’s, and I also work for David Brooks.

I just had a question about, it seems to me that one of the most legible ways to become involved with foreign policy previously was to go through the government. And obviously it’s a topic right now. There aren’t many pathways into the government right now for many people, nor are there pathways into the nonprofit sector—think tanks, things like that. So what, to you, is the pathway for young people who want to become more involved in foreign relations?

FROMAN: More involved? Yeah. Yeah, look, we are going through a challenging time now, where I think a lot of people who said, OK, I’m going to do this for a couple of years and I’m going to go into government, are suddenly finding that those opportunities either aren’t available or not necessarily as attractive as they once were. And are going to have to rethink some of their plans. I think it points to another more—you know, a bigger issue, which is you just can’t always plan. You know, you just have to take advantage of opportunities as they arise. And I think, whether it’s getting involved in things like the Council as a young professional or as a term member, as a way of staying involved in the issues—and not just the Council. But there are lots of organizations like the Council where you can participate and keep one foot in that world, even as you’re doing your professional development in some other area.

The other thing is, I spent half my adult life in the private sector—Citigroup, MasterCard. Both big global firms. And I found that there’s a lot of work you can do in the private sector that touch on these big, public questions, you know, whether it’s around economic development or whether it’s around financial inclusion. You know, there’s just lots of ways of—if you’re really committed to focusing on some of these issues, that the private sector, there are ways of doing it. And sometimes you have to work hard to find it or to develop it. And it’s mostly successful when you can align those greater goods with the underlying business model and the strategy of the company that you’re working for. But it’s doable. And I would encourage people to think about doing it, even when you’re in the private sector, keeping you know one eye out for how do you use the tools of the private sector in your platform there to stay involved in the issues that you care about, as well as what you do outside the office.

SINGH: Thank you, everyone, for joining today’s session. And thank you to Mike Froman.

Please note that the video and transcript of this briefing will be posted on CFR website. If you’re attending in person, please join us for a reception outside of the room.

FROMAN: Thank you.

SINGH: Thank you. (Applause.)

(END)

This is an uncorrected transcript.