How the World Sees the U.S. Right Now

CHRISTIANE AMANPOUR: Now, many of the America’s allies around the world are looking on aghast. “The Financial Times”‘ editorial about the Trump administration’s crackdown on peaceful protests is titled “America’s Battered Moral Standing.” Roula Khalaf is the paper’s new editor and the first woman to hold that post. She says, this is undermining Washington’s ability to hold the high ground with authoritarian regimes abroad. Here, she’s talking to our Walter Isaacson about the challenges of these turbulent times.

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WALTER ISAACSON: Thank you, Christiane. And, Roula, welcome to the show.

ROULA KHALAF, EDITOR, “THE FINANCIAL TIMES”: Thanks for having me.

ISAACSON: This past week, we saw the anniversary of the Tiananmen Square uprising. It was commemorated in Hong Kong by huge protests. And there were also huge protests around the United States and in certain places around the world because of the killing of George Floyd. What was going through your head as you saw the protests around the world, and especially how the protests were playing out in the United States?

KHALAF: I think this is a really good point, because the U.S., of course, has reacted to the Hong Kong protests in the way that one would expect. But the president has not reacted to the U.S. protests in the way that one would expect. And I think this is the difference that shocks and dismays a lot of people around the world, because what credibility does the U.S. have when it calls on Hong Kong — the Hong Kong authorities or the Chinese authorities to treat protesters better, peaceful protesters, with respect, when, in the U.S. itself, the call is to send the Army out, and when protesters are being removed so that the president can have a photo-op. So, I think this whole episode further erodes the credibility of the U.S., but also the moral authority of the U.S. I mean, I have covered a lot of protests in my career, revolutions and uprisings. And everyone would look to the U.S., would hang on every word that the State Department or the White House would utter, is — and there’s always been a belief that if the — that the U.S. is the only outside power that can make a difference and can have — that can insert pressure on governments to actually act and not to deal with protests forcefully and not to crack down on peaceful protests.

ISAACSON: When you the killing of George Floyd, the knee on the neck and him gasping, saying he couldn’t breathe, what ramifications, repercussion did that have both in Britain and in Europe?

KHALAF: I think very similar to the repercussions that any American would have had. Of course, there’s always a delayed reaction, if you’re not in the country where such an outrageous act plays. So, I think, day after day, the anger and the outrage felt by people outside of the U.S. turned into protests. And I think the protests that I have seen in Europe and in the U.K., part of it is about the killing of George Floyd, but I think part of it is also about the discrimination that people feel in their own countries. So, I think this has been to — perhaps a wakeup call for these people. On a personal level and on a professional level, I think it also makes you think about diversity in the workplace. And we talk a lot about diversity, but are we really diverse? I think this is the debate that’s also going on in a lot of companies in Europe today.

ISAACSON: You have been an expert in covering China, both as a journalist yourself, and your newspaper. What do you see that the West should be doing or the Trump administration should doing to get China policy back on an even keel?

KHALAF: I think we’re in a very, very tricky situation right now, because a lot of the assumptions that the West has had about China, not least that economic prosperity would eventually lead to a certain level of political liberalization, I mean, that assumption has not borne out. But what I think the Western governments also did not expect is the consolidation of power by Xi Jinping and the increasing tilt towards even greater authoritarianism. So, this is on the Chinese side. On the U.S. side, you have also had a hardening of attitude, not just in the White House, but across the political spectrum. Of course, the fact that the president also uses China as a political football in domestic politics as well, that doesn’t help. So, what I want to see is an escalating spiral. And we have just written an editorial about this, where we said that what we need is a kind of reset. You have to agree with the Chinese to disagree on certain things. No one is going to be supportive of the policy in Hong Kong, human rights violation, the potential hardening of Chinese attitudes towards Taiwan. But there are areas where you could still cooperate. Climate change is one of them, trade and commercial relations. And there has to be at least an attempt to separate what you can work with China on and what you cannot.

ISAACSON: I just want to push back there. You say we can cooperate on climate change, we can cooperate on trade, but that’s — those are things that the U.S. doesn’t want to cooperate on.

KHALAF: Yes. And this is where I was going, is, am I optimistic about this? I’m not optimistic in the short term, no, because I think that, in the next few months, as we get closer to the U.S. election, I think this relationship is going to deteriorate further. Now, I think we have to start looking past the election, whether it is a Republican or a Democratic administration, because I think, once you have gone at — once you have moved away from the political, then maybe that can be the time to rethink the relationship with China, and to put it on a different footing. And I also think that this is not just an issue between the U.S. and China. Europe is a major player here. And Europe has a role to play. I think the Europeans in the past few months have not actually just blindly gone behind the U.S., as well the case, for example, where both Germany and the U.K. have been a lot more balanced as in their attitude to Huawei.

ISAACSON: At the core of what “The Financial Times” has stood for throughout its history is the importance of free markets, free trade, free ideas, a good economic system, a very sober-minded approach to the world. And yet, over the past 20 or 30 years, we have seen this backlash against globalization, a backlash against free trade, against immigration, and sort of a populist feeling that “Financial Times” reader should not be ruling the world or consolidating Europe. What are the underlying…

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KHALAF: You mean the Davos elites.

ISAACSON: The Davos elite who subscribe to “The Financial Times,” their world has been upended by this populist backlash. What’s the cause of that? And, by the way, did we — and I will put myself in the category of a “Financial Times” we reader — get things wrong? Did we misunderstand the resentments that were being built up because of globalization, trade and immigration?

KHALAF: I will say a few things. First, I do think we have to remember how much better globalization has brought, how many people were lifted out of poverty around the world. I think that the reason that we have seen a rise in populist nationalism and a backlash against globalization is because of the way that it was managed or, rather, mismanaged in terms of its impact on certain community. I mean, Brexit, for example, is an example of the backlash. And that is because what I think a lot of policy-makers forgot is that right around them in their own backyard that there was an impact that was not being addressed. That is, I think one of the mistakes. I think the other is, you have to go back to the financial crisis and the extent of the financial crisis. Often, when you have big shocks, the ramifications aren’t necessarily about — not all the ramifications are felt right away. Some of it comes with a delayed reaction. And I think part of this, the — the new sort of sentiment of being anti-E.U., anti-globalization has to do with the fact that inequality has widened in the last decades, and nothing was done about it. We were just moving ahead and thinking about the stock market. And I think that it was almost — it was — it’s a wakeup call. It’s a wakeup call to say, OK, what has gone wrong? How do we reset capitalism? What should be the policies that are more distributive, without losing sight of the benefits of globalization? I mean, we are, of course, and we will always remain advocates of free trade and free markets, because we think that that is where the economic benefit is for everyone. But we also have to take into account the pitfalls, the — where it needs to be reset and reformed.

ISAACSON: But let me push back on you a little bit.

KHALAF: OK.

ISAACSON: Haven’t events in the reason five to 10 years caused you to question a little bit more the absolute benefits of free trade?

KHALAF: I wouldn’t say to question. I would say to think a lot harder about the impact of free trade, not only on countries that are — where production is cheaper, for example, but the impact on the U.K., for example. And, I mean, you say free trade. We can about free trade and free movement. And in the U.K., in particular, there were communities that should have been supported at a time when borders were completely open to other E.U. nationals. And that didn’t happen. So, it’s not a question of, do I question it intellectually? I think questioning it — questioning the practice and the impact, yes, certainly. And, I mean, we have written an awful lot about this.

ISAACSON: You’re just coming out of lockdown now. This past week, you have taken the baby steps over there in Britain to come out. Do you think that the timing is right? Are you sending your kid back to school, in other words?

KHALAF: I am. I sent my kid back to school yesterday for the first time, because his class is back. I think, generally, a lot of people still feel that we’re coming of lockdown early, because the number of infections is still high. The number of daily deaths is still higher than most other European countries. I think, generally, it is felt — And we certainly say that in our editorials at “The F.T.” — that this crisis was not well-managed by the government. Of course, the prime minister, Boris Johnson, did himself get sick and was in hospital for a while. And, of course, that didn’t help. But we feel that, generally, this has not been handled properly. And our concern is that, as we come up — come out of the lockdown, the test and trace system that is needed for an effective easing is still not there yet.

ISAACSON: Well, as “The Financial Times,” you cover very much both the finances of the world, but also Europe and then Britain. Do you think that, with Brexit looming or coming down the pike, you not only need to figure out what the European Central Bank is going to do, but what the Bank of England is going to do? And how will that play out?

KHALAF: The government’s argument is that we should go ahead and have — and leave the E.U. for good, because we have already officially left the E.U., whether we get a comprehensive deal with the European Union, or we could do it without a deal. And some of the arguments that you hear is that, because the COVID has had such a negative impact on the economy, and because we have to think anew about what the structure of the economy is, what the fundamentals are, what kind of economy we want, that we might as well just have Brexit at the end of the year with or without a deal. Most economists, however — and that is certainly a position held by the “F.T.” — is that you are facing — we’re still dealing with a real shock. And we now see, not only in Britain, but everywhere, what we are calling the recovery. But that is because we have — we have reached the bottom, and we’re coming back up, whatever shape this takes. But the reality is that there’s — in a few months, we will know how much scarring there has been. And what I mean by that is, we’re not going to return to the same level that we were at just before the pandemic. So we will be facing a very, very difficult economic situation, with millions of people who are unemployed, with sectors that are completely ravaged. And so it would be an added burden on businesses and on the economy to actually leave the European Union at the end of the year without a deal, i.e., in an — in a fashion that is not orderly.

ISAACSON: Thank you, Roula, will for joining us.

KHALAF: Thanks for having me.