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Fareed Zakaria GPS

Why the U.S. Attack Venezuela; What America's Venezuela Operation Means for the World. Interview With Carnegie Endowment For International Peace Senior Fellow Karim Sadjadpour; Interview With Breakout Capital Founder And Chief Investment Officer Ruchir Sharma. Aired 10-11a ET

Aired January 04, 2026 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:40]

FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you live from New York.

Today, we'll devote much of the program to yesterday's extraordinary events in Venezuela. The capture of a sitting head of state, President Nicolas Maduro, and his removal to the United States to face justice. The big question, of course, what happens next?

I will talk to one of the smartest outside observers of Venezuela, Phil Gunson, live from that country's capital, Caracas.

Then what precedent does this American action set for the rest of the world? I'll talk about that and more with Richard Haass and Zanny Minton Beddoes.

Then Iran, the people are rising up and taking to the streets once again in the largest protests since the 2022 killing of Mahsa Amini. What does this mean for the future of that regime? I'll discuss with the Carnegie Endowment's Karim Sadjadpour.

I'll bring you my take later in the show, but I wanted to get straight to the big news of this weekend. Ousted Venezuelan President Nicolas Maduro woke up this morning at the Metropolitan Detention Center in New York City around 24 hours after he was woken in the middle of the night by U.S. special forces and FBI agents, and taken on a journey that ended in Brooklyn.

The raid and coinciding strikes on military installations and communications infrastructure in Venezuela followed months of escalating U.S. attacks on alleged drug boats, oil tankers and a port facility in Venezuela. Yesterday, President Donald Trump said the United States was, quote, "going to run the country until such time as we can do a safe, proper and judicious transition," unquote.

But Maduro's vice president, Delcy Rodriguez, was sworn in as the interim president and denounced the American action.

Joining me from Venezuela's capital, Caracas, is Phil Gunson, senior analyst for the International Crisis Group.

Phil, welcome. Explain to us what feels to me like the sort of central puzzle right now, which is the president says that the Venezuelan government is going to do what the United States wants, specifically that Delcy Rodriguez is going to do what the United States wants. She, on the other hand, has denounced the American action as barbaric, illegal, and in fact claims Maduro is still president of Venezuela.

Is she putting on an act? Is this -- do you think there was a secret deal between the Trump administration and Rodriguez so that they can, in effect, decapitate the regime rather than replace it?

PHIL GUNSON, SENIOR ANALYST, INTERNATIONAL CRISIS GROUP: Well, thank you, Fareed. That is indeed the central question. And of course, some of it is speculative. We don't know if there was a secret deal, by definition. But my sense of this is that we have to take Trump's words with something of a pinch of salt, as you might say.

Trump is claiming that the Venezuelan government under Delcy Rodrguez is going to do as he says, that the U.S. is running Venezuela. I think there are a number of caveats there. I mean, first of all, the U.S. is not here and is not running Venezuela. The Venezuelan government is running Venezuela minus Nicolas Maduro. Delcy Rodriguez, even if she wanted to, would not be able to make a deal with Donald Trump along the lines that Trump wants without taking --

ZAKARIA: I think we've lost Phil for a second. We're going to try and bring him back as quickly as we can. We're going to take a break and we're going to come back and try to get you Phil Gunson, if not Richard Haass and Zanny Minton Beddoes. Stay with us.

(COMMERCIAL BREAK)

[10:09:06]

ZAKARIA: Sorry about that. We lost our connection to Caracas, but let me bring in "The New York Times" White House and national security correspondent David Sanger to talk about all these events.

David, as I was trying to get from Phil Gunson, the key question is, has this vice president and now acting president Delcy Rodriguez made a deal with the Trump administration, and does she have the authority to make that deal? Because, you know, Venezuela is run really by the military and the defense minister and interior minister would also have to go along with this, right? Do you have any thoughts, any reporting on that?

DAVID SANGER, CNN POLITICAL AND NATIONAL SECURITY ANALYST: We've been trying to figure out what kind of conversations are taking place, Fareed, between Secretary of State Marco Rubio and the vice president and the rest of the regime. But it's fascinating that the administration is taking this path in any case, and is trying to go do this because having declared that Maduro was an illegitimate president, also the statement that the Biden administration made, then it would follow the reason that the vice president and the rest of that government is also illegitimate. [10:10:18]

So, you know, the president had a choice here. He could have gone with Miss Rodriguez. He could have declared that the winner of the -- presumed winners of the election last year were, in fact, the legitimate rulers. He chose not to do that. What he basically said was, we're going to put in place anybody who will follow American instructions. And if that fails, there can always be the second wave.

It's kind of a virtual occupation of the country. We don't have troops on the ground, but we have the threat that troops could come in.

ZAKARIA: And what it sounds like, you know, they're saying is forget about democracy, forget about human rights, forget about any of those concerns, even drugs didn't come up in terms of what he wants out of Venezuela. What Trump talked about was access to oil. That seemed to be the number one, two and three demand that American companies be given access to oil, which makes this feel very much like some kind of, you know, 19th century imperialism strategy, more than anything to do with, you know, getting rid of an evil dictator, bringing democracy to the people of Venezuela or even dealing with the drug crisis.

SANGER: Well, you know, Fareed, I think you've got that exactly right. The word democracy and restoring democracy to Venezuela did not come out of the president's mouth yesterday. What did was this fairly lengthy discussion of how American companies that have been denied their rights for their operations, expropriated and all that, needed to get restored, their money and their opportunity to get at the oil.

You know, when you go into the White House these days, you see a portrait of William McKinley hanging. I don't remember McKinley in the years I've covered the White House and it's been some time as you know, appearing there. And, of course, McKinley was president during the Spanish-American war when we took the Philippines, Guam, Puerto Rico, and he was mentioned explicitly in the president's inaugural address.

So -- he also loved tariffs. So it is conceivable that the president really is pursuing that route. And you heard him yesterday discuss the Monroe Doctrine, not something you would think Donald Trump would spend a huge amount of time on because the new national security strategy has this Trump corollary, which basically says the United States asserts a right to go in and work on the inner workings of neighboring countries in the Western Hemisphere to make sure that they are pursuing American interests.

ZAKARIA: That's right. And again, they're pursuing American interests, which means, essentially commercial interests of large American companies. It's not even clear to me how this helps, you know, certainly the average MAGA voter.

SANGER: Absolutely.

ZAKARIA: David Sanger, always, always a pleasure to talk to you.

Next -- SANGER: Great to be with you.

ZAKARIA: President Trump's actions in Venezuela, of course, seismic for the people in that country. But they will also have reverberations across the world. Richard Haass and Zanny Minton Beddoes on that when we come back.

(COMMERCIAL BREAK)

[10:18:02]

ZAKARIA: In his messaging about the U.S. capture of Venezuelan President Nicolas Maduro, President Trump has portrayed his own administration as enforcers of security in the Western Hemisphere after decades of neglect from past U.S. administrations. The State Department took to social media yesterday with a message to the world -- Don't play games with President Trump.

But does Americas unilateral action in Venezuela, a country that did not present an imminent threat to the U.S., make the world safer?

Joining me now to discuss this and more are Richard Haass, president emeritus of the Council on Foreign Relations, and Zanny Minton Beddoes, editor-in-chief of "The Economist."

Richard, you were a senior official in the Bush Senior White House in which the closest parallel to this took place, which was the capture of Noriega. The United States did kind of invade Panama and take the head of state. What do you see as the parallels and the differences?

RICHARD HAASS, PRESIDENT EMERITUS, COUNCIL ON FOREIGN RELATIONS: I think, Fareed, the parallels of what you've just articulated, this was someone who was seen as a threat involved in the drug trade. The United States went in and so forth. But that's where the parallels break down. American servicemen had been killed in Panama. You had this massive strategic interest called the Panama Canal.

And also, what you didn't have were commercial interests. The United States was not there to mine Panama or advantage American companies. This was, if you will, a traditional foreign policy issue. Say one other thing. Think about the difference between Panama and Venezuela. What a country about a 10th the size, a 10th the population. So the magnitude of what this administration has taken on in Venezuela dwarfs what the Bush 41 administration did in Panama.

ZAKARIA: Zanny Minton Beddoes, to me, that does seem a fascinating, you know, challenge, which is if the administration does run Venezuela, even indirectly, or take responsibility for it, what we have learned from Iraq and Syria is countries that have had 20 to 30 years of sanctions, where millions of their best people, professionals, educated, have left the country, they're kind of hellholes, and they're very hard to stabilize.

ZANNY MINTON BEDDOES, EDITOR-IN-CHIEF, THE ECONOMIST: Yes, absolutely. I mean, you will have heard this morning, administration officials and Republican members of Congress saying that Venezuela is very different. It has a long democratic tradition. All of that is true. But for me the -- so I don't think there are exact parallels with the Middle East. But you're absolutely right. The regime change is hard. It's very relatively easy to get rid of an old regime compared to the difficulties of building something new.

But I think for me the striking thing from President Trump yesterday is I don't think he gives two hoots about democracy in Venezuela. I think he'd be very happy to be cutting a deal with remnants of the regime that give the United States access to the oil. And I think that's really what this is about, much more than nation building in the traditional, you know, George W. Bush sense of the word.

ZAKARIA: Yes. I mean, this does feel like the national security strategy paper that the Trump administration put out, right? It has all those elements.

HAASS: 100 percent. If you wanted the case study, almost the unvarnished essence of the Trump doctrine, turn on your TV. What is it? The United States acts unilaterally without -- and actually the executive branch acts unilaterally. No congressional role, no international role, no regional role. We do it on behalf of what? Not democracy, not human rights, not the rule of law, but American commercial interests to advantage American corporations.

Where is it taking place? Not in the traditional centers of American foreign policy. Not in Europe, not in Asia, not in the Middle East. But where? In the Western Hemisphere? It's almost an extension of homeland security, Fareed, if you think about it. A little bit of a drug issue, eight million people have already left Venezuela. Quite a few came to the United States. Commercial interests.

This is the -- this is the pure essence of Mr. Trump's foreign policy. And it is a significant departure.

ZAKARIA: And the point you make is so interesting when you think about Iraq, the Iraq war, the Bush administration, whether you agreed with the policy or not, assembled a 40 plus nation coalition. It went to the United States.

HAASS: The United Nations.

ZAKARIA: The United Nations. It went to Congress. It painstakingly explained, you know, what it was trying to do. It tried very hard to bring democracy to Iraq. And by the way, we should note Iraq is a functioning democracy right now. So all of that very different from this, which seems like a, you know, as you say, a kind of -- it strikes me as like old fashioned 19th Century imperialism. We're going to take the goodies in this country.

But, Zanny, talk about that. The oil sector in Venezuela. So Venezuela has 17 percent of the world's oil reserves, but it produces only 1 percent. It is the 21st producer of oil in the world. That's going to take a long, long time to rebuild, right? I mean, what we -- look at Iraq, it took -- Iraq is, you know, still not at what people think its potential could be. MINTON BEDDOES: Yes, absolutely. So Venezuela has the world's largest

proven oil reserves, but it actually produces just under a million barrels per day because it's had two decades of disrepair and corruption collapse. It is going to take a lot of investment and a long time to rebuild that. And actually, in the very short term, if anything, you might see less output because in part from the seizure of the tankers, there's a bunch of Venezuelan oil already on the high seas.

They don't have the stuff that they need to make it transportable. It's very heavy crude. It is useful for U.S. refineries, but it's not likely that it's going -- the production is going to increase much anytime soon. And I don't see a huge amount of appetite from U.S. oil majors to rush in there given the level of uncertainty. So the whole energy side of this, I mean, maybe the Trump administration is thinking this brings oil prices down, which is good for the midterms.

But I think this is going to be a much harder thing of its own accord. But more broadly, I think that I'm not sure that I would say, as Richard does, that we know what the Trump doctrine is. I think we know the Don-roe doctrine now. We know what his route is and what he wants to do in the Western Hemisphere. And it is a very 19th Century approach of this is my backyard. The U.S. can do what the heck it likes, and we care about resources.

And if you think, remember, last year we had hints of this with his talk about Panama Canal, his talk about Greenland. I must say, if I were Greenland now, or indeed if I were Cuba, or if I were Colombia, I would be really worried because this is an administration that clearly thinks it has an absolute right to do whatever it likes in its own backyard. And if I was Xi Jinping or indeed Vladimir Putin, I would start, you know, thinking, hmm, maybe I can do what I like, too.

ZAKARIA: Let me just quickly ask you to elaborate on something you said because you are a trained economist.

[10:25:03]

You don't think that this will have much impact on the price of oil and therefore on inflation expectations this year for the midterms?

MINTON BEDDOES: Not in the short term, because, first of all, I mean, we'll see what happens in the markets tomorrow. But in the short term, I don't see a likelihood of a huge increase in the supply of oil. It's going to take a while to repair the mess there, and then it's going to take a huge amount of investment to actually get the production going up to anywhere where it was two decades ago.

So this is -- this is not something that's going to happen overnight. And perhaps more importantly, the price of oil at around $60 a barrel, is already at a level which if it falls much more, it won't be actually particularly economical to exploit Venezuelan oil. So don't get too excited about the commercial prospects of Venezuelan oil.

ZAKARIA: Now, Richard, this could succeed on its own terms if you do get what clearly Trump is hoping for, which is no regime change, no democracy, simply get rid of Maduro and have the existing regime, brutal, tyrannical, dictatorial, agree to the one condition he wants, which is let Americans into their oil industry.

HAASS: That's what he's hoping for, so we would stop using the phrase regime change. We talk about leadership change. You could forget about nation building. You say remodeling the society or anything. It would simply be the United States would enter a new transactional relationship with Venezuela. The sanctions would go and we would start developing and, you know, ultimately exploiting the oil fields. Possible, in which case they could get they could declare a victory at very low cost.

But, and it's an enormous but, at the international cost of setting this precedent and reinforcing what you might say is the notion of spheres of influence. If we have a free hand here, Zanny was saying, I bet the people -- you know, however unhappy, let me put it this way, Fareed. However unhappy Putin and Xi Jinping might be about a short term loss of their interest in Venezuela, I expect they are extraordinarily happy nodding their head, applauding, saying, great, we like this precedent because this reinforces how we view our regions of the world.

And that could be ultimately the biggest cost of this, not what we do in Venezuela, but how we change. We go from a world order to three regional disorders, and this is a really dangerous development.

ZAKARIA: Yes. And to me, it's striking that it has the effect of shrinking the United States's role, which was really the arbiter of that global order, instead saying we just are going to be strict enforcers of our region. And by the way, you, the Russians, can do what you want in your region, which massively inflates Russian power, which is, you know, and you, the Chinese can do whatever you want in your region.

HAASS: It does exactly that. And it's consistent with the pulling back from international institutions, the use of tariffs, rather than working through the World Trade Organization. Again, it's a narrowism, a narrowing of American foreign policy and the geographic sense. And in the unilateral sense, for 80 years. Allies and institutions have been at the core of American foreign policy. In the last I checked, it worked pretty well.

We made some mistakes. We overreached a time, but it's been an unprecedented era that has been good for the United States. We are essentially discarding that now for something radically different.

ZAKARIA: Richard Haass, Zanny Minton Beddoes, always gets smarter talking to you. Thank you so much.

Next on GPS Iran. Thousands of citizens have taken to the streets of that country, and President Trump has vowed to protect them against the regime. How will all this unfold? I will ask a super Iran expert when we get back.

(COMMERCIAL BREAK)

[10:32:56]

ZAKARIA: Mass protests have once again erupted in Iran. Thousands have taken to the streets triggered by an ailing economy, plus chronic energy and water shortages. These are the largest demonstrations the country has seen since the protests that followed the death of Mahsa Amini. President Trump has vowed to intervene if Iran kills peaceful protests. Warning that the U.S. is locked and loaded.

Here to discuss the situation is Karim Sadjadpour, a senior fellow at the Carnegie Endowment. Karim, let me ask you. You know, there have been these kinds of protests periodically in Iran, and we always wonder, you know, is it going to make a difference? And the regime is always able through extraordinary brutality, to tamp these down, to shut down these kinds of protests? Does it feel to you that this time it's different?

KARIM SADJADPOUR, SENIOR FELLOW, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Not yet, Fareed. I think it's still too early to say that this is another reminder that there's probably no country in the world with a greater gap between the conduct of its government and the aspirations of its -- of its people than Iran. But the Islamic Republic of Iran, I described it as a zombie regime. It has a dying ideology. It's -- you know, it's increasingly bankrupt financially. But it's still capable of lethal force in order to survive.

And I think the regime has essentially reached a dead end, and that the status quo is no longer sustainable. But it also realizes that if it tries to reform, it could well accelerate its collapse just as what happened with Gorbachev in the Soviet Union. But at the moment, you know, we still see the regime security forces intact and the crowd sizes are still manageable. But that could quickly change.

ZAKARIA: The two things that I'm struck by that are different, is the tale of two presidents. Pezeshkian, the president of Iran, seems a very different figure from the traditional ones.

[10:35:01]

He's not a hardliner. He's a doctor. He has far from condemning the protesters. He's actually conceded many of their points and even their demands and said, you know, we, the Iranian government need to do better.

And the second, of course, is Trump. First time ever an American president has made a threat and said, if you guys fire on these protesters, we will do something. Do those two things strike you as materially different?

SADJADPOUR: Those are different circumstances than in past protests. But I don't think that either one of them are game changers at the moment, and that it's true President Pezeshkian has tried to appeal to people's grievances. But at the end of the day, Iran is still ruled by the supreme leader and the supreme leader believes that if you seed anything to protesters, that's not going to actually pacify them that's going to project weakness and invite them to protest even more. So, I expect that in the coming days, the regime will try a major crackdown. And in the case of President Trump, you know, on one hand that probably gives a morale boost to some Iranians who welcome President Trump's statements.

But at the end of the day, it's not simply presidential statements that are going to be game changers in Iran. You need sustained U.S. support, sustained U.S. attention. And ultimately, what we've seen, Fareed, over the last two decades in the Middle East is that in places like Afghanistan and Iraq, U.S. can, you know, do a lot but it can't dictate those outcomes. Those outcomes will be decided by the people of Iran.

ZAKARIA: You mentioned the supreme leader. I got to point out at this point that is another possible kind of variable that could shift everything, right? The guy is, what, 85 years old, longest serving dictator in the world right now in fairly bad health. Does that matter that he, you know, or really the revolutionary guard running the country at this point?

SADJADPOUR: No, no, I do think that's very important. He is 86 years old, longest serving autocrats in the world. And one of the things that we didn't anticipate, we didn't know about in the 1979 Iranian revolution was that the Shah of Iran had terminal cancer.

So, I think there's the interplay between three forces are very important. What is the physical and psychological health of the supreme leader? How cohesive are Iran's security forces and what is the psychology of Iran's protesters?

These things are all interrelated. If the security forces feel like the leader is faltering or he's dying, that may change their calculations. And if the protesters see that the security forces or the regime is starting to splinter, or the or the leader is ailing, that could embolden them as well.

ZAKARIA: Do you think that there is much credence to these reports that Israel is thinking of launching another attack on Iranian nuclear facilities, and if so, does that mean that Iran has quietly been rebuilding some of these facilities? What is the best that you are hearing?

SADJADPOUR: You know, I think, a possible Israeli follow on attack seems certainly within the realm of possibilities targeting perhaps not just Iran's nuclear facilities but even more likely, its missile facilities and this fear that Israel has that Iran has been rebuilding its air defense capabilities, its missile facilities. And so, I think that's certainly a factor.

And what we saw last June, Fareed, is that after the Israeli attack, many argued that this was going to create a rally around the flag effect for the Islamic republic. But that proved very short lived. And ultimately people's, you know, economic and social and political grievances once again reemerged.

ZAKARIA: Karim, as always, a pleasure to talk to you. The story is going to continue, and we will be back to you for insights. Thank you so much.

Next on GPS, 2025 brought tariff hikes, tax cuts, government layoffs, and stock market highs, especially in the United States. What will happen to the economy in 2026? Ruchir Sharma gives us his predictions on all kinds of things. Stay with us.

(COMMERCIAL BREAK)

[10:44:03]

ZAKARIA: As we begin the new year, we always love turning to Ruchir Sharma for insights about where the economy is headed. He will release his annual top 10 trends in the "Financial Times" tomorrow. And he's here to give us a preview.

Ruchir is the chairman of Rockefeller International, founder of Breakout Capital, and the author of "What Went Wrong with Capitalism." Welcome, Ruchir. The A.I. bubble. What do you think happens with that this year?

RUCHIR SHARMA, CONTRIBUTING EDITOR, FINANCIAL TIMES: Well, as you know, Fareed, there are four benchmarks that I look at to know if we are in a bubble or not. And to varying degrees on those four benchmarks of overvaluation, over ownership, over leverage, and over investment, the A.I. bubble checks off.

The most surprising statistic there is that Americans now have more of their wealth in the stock market than in property. And that's the first time.

ZAKARIA: First time.

SHARMA: The first time ever and possibly the only country in the world, at least any major country, that we look at all the data for, that's what's happened.

[10:45:01]

So, I really feel that this is getting pretty extreme.

ZAKARIA: Is it going to burst?

SHARMA: Well, I think that there's one trigger which causes this to burst and that trigger -- I'm looking at bubbles for the last 300, 400 years is always when you get higher interest rates. So, I think that's what I'm looking for.

The moment interest rates rise and we can see the sensitivity here that even if long-term interest rates rise somewhat, we're currently around four percent in the U.S., but if this year we get to even four and a quarter, four and a half, I think that's a major risk and why the bubble can burst then.

ZAKARIA: You say that A.I. is also a big part of the China story. Explain what you mean. SHARMA: Well, if you look at the Chinese stock market returns last year, much like the U.S., a lot of it was powered by A.I. But outside of that, in fact, the Chinese economy is struggling. That if you look at the earnings growth of the Chinese stock market, excluding the tech sector, it was actually negative. And I think this is one thing being lost on many people, which is that what's the Chinese economy is really being driven by its export powerhouse.

So the market is being driven by A.I. and the economy is being driven entirely by what it's doing, you know, with its exports. The domestic economy in China is in trouble, which is that the property market is bust, the population is shrinking. And the fact is that the debt levels in China are in fact higher than America's debt levels. And that is quite a scary picture.

ZAKARIA: When I go to Europe and when you go to Southeast Asia, what you're struck by is that they're very worried about cheap Chinese exports flooding their countries and destroying their manufacturing capacity. So, the thing that Americans are worried about now the Europeans and the Asians are worrying about.

SHARMA: Yes, because they are really cutting prices, which is hurting many countries out there. Now, what happened in 2025 was that all the energy of the countries was very focused on fighting America's trade war, which is that the tariffs were going up so they were very focused on that and they couldn't take on two superpowers at the same time.

Now, it seems to me that the tariff war, at least, that America was waging, partly because of the affordability crisis that seems to be sort of going more in the background. So, now the attention and one of the big trends of 2026 is that these countries, and I see the evidence everywhere, I traveled to countries like Indonesia, France, they're all now complaining about the fact that their economies are getting so badly hit by the glut of Chinese exports coming into their economies. It's costing jobs. It's leading to the manufacturing sector shrinking.

So, I suspect that in 2026 the attention on the trade front is going to turn away from the U.S. to China and to deal with this problem of dumping, which is a real problem for so many countries because it's costing jobs and leading to this process of deindustrialization.

ZAKARIA: You have one piece of good news, a trend which is -- which you like, which is deregulation around the world.

SHARMA: You know, one of my big themes, again in 2025 was that I'm not sure if America will become great again because of Trump or so, but he is likely to make the rest of the world great again. And the policies that he's doing, you know, like, has led to a bit of an existential crisis in some places including in places like Europe which really felt that something we need to do to try and compete with America.

ZAKARIA: Compete with the kind of a hostile America, right? It's almost given them a kick in the pants.

SHARMA: Yes. I think that the broad trend here is this, you know, that the deregulation which the Trump administration speaks about and it is following through somewhat on that, that the number of new regulations that they've introduced has gone down significantly, but the rest of the world, even places like Europe, you know, which was referred to as the Silicon Valley of regulation, that even they are now sort of really stepping back on the regulatory front.

But even other countries I go from India, Indonesia, where we all travel, deregulation is really becoming a big buzzword, and I suspect that's going to drive a lot of the economic reforms in these countries in 2026.

ZAKARIA: Finally, you say we're at peak alcohol. Explain what you mean.

SHARMA: There are more Americans saying, you know, that they're turning against alcohol or consuming less alcohol, right? So that I think is a very big shift which is taking place, which is that the rate of alcohol consumption is declining. And you can see that even in the stock prices, that the worst performing stock prices this decade of any subsector, in fact, is of the so-called alcohol sector.

Why is this happening? A part of it is because some of this is switching to cannabis, which, you know, like some people think it's healthier. That's up for debate. But I think the more important thing here is that a lot of self-awareness is taking place here, which is that increasingly, studies are showing that this myth that if you drink even once a day, it's OK for you, no. So, therefore the final trend I put it there is that we are at peak alcohol.

ZAKARIA: All right. We'll have to see whether, you know, after New Year's eve binges, people will keep their pledges to have to drink less alcohol.

[10:50:00]

Ruchir, pleasure to have you on.

SHARMA: Thanks, Fareed.

ZAKARIA: Next on GPS, I'll bring you my take about the one question that is likely to be resolved in 2026, the fate of Ukraine, when we come back.

(COMMERCIAL BREAK)

ZAKARIA: Here's my take. January inevitably spawns a cottage industry of forecasts. Will the U.S. economy slip into recession? Will the stock market discover gravity? And 2026 contains more than the usual share of genuine uncertainty. But one question is likely to be resolved this year, the fate of Ukraine.

[10:55:03]

And depending on which way it goes, the consequences will not be incremental, but rather seismic for the international system. The situation is grim. From the start of its second term, the Trump administration has followed a simple, if amoral theory, pressure Ukraine to make concessions, package those concessions as the realism necessary for peace, then present them to Vladimir Putin in the hope that he will take a deal.

But when gifted the summit with Trump in Alaska that promised major concessions and left Ukraine out, Putin demanded more, more territory than he had already seized in his war of aggression. As Churchill said of another aggressor, the appetite may grow with eating.

Now, at that point, President Trump had options. He could have pivoted to seriously pressure Russia. Instead, as "The New York Times" reported in an exhaustive account, the administration has been ramping up the pressure against Ukraine, withholding arms and intelligence, slow walking what supplies it does send and always leaving the country uncertain and nervous about U.S. support.

It sometimes seems as if the Trump administration wants Ukraine to lose so that it can be done with this complicated war. In late December, President Volodymyr Zelenskyy said, the U.S. was offering a 15-year security guarantee as part of a peace plan. He was hoping for something much longer, up to 50 years, to deter Russia.

Now, 15 years might sound like a substantial guarantee in a briefing paper. In reality, it is perilously close to meaningless, a time limited guarantee advertises its own expiration date. It tells Moscow, bide your time, rebuild your forces and return when the clock runs out. It also tells every investor, insurer and boardroom in the world that long horizon commitments in Ukraine are a gamble against the calendar.

Who finances a power plant, a rail corridor, a semiconductor facility, or even just a slow patient rebuilding of a national economy if the country's security is contractually uncertain by a certain date. This is why serious peace settlements are built on durable architecture, not provisional promises.

There is a profound difference between a ceasefire and a peace deal. A ceasefire is a pause in fighting. It may be necessary, even lifesaving, but it is inherently transient. A peace deal is a new order rooted in credible deterrence, political support, and a framework that reduces the incentive and capacity to resume the war.

We have just watched this distinction play out elsewhere. The administration can rightly claim it helped broker a ceasefire in the Middle East, yet it has been unable to translate that initial halt in violence into an enduring settlement with enforceable political terms and credible guarantees.

Israel still controls more than 50 percent of Gaza. Hamas is still in power and violence remains widespread. That's not a critique of diplomacy. It is a reminder of its limits. A ceasefire can be achieved by exhaustion, peace requires structure.

The Ukraine war is the ultimate test case because it is not merely a border dispute, it is a referendum on whether conquest is back openly, unapologetically in 21st century geopolitics. If Russia is allowed to seize territory by brute force and then after sufficient destruction have that seizure ratified through western pressure on the victim, Ukraine, the lesson will echo far beyond Europe. It will be heard in every capital that lives in the shadow of a stronger neighbor, especially in an Asia increasingly dominated by China.

The rules based international order will not be abolished with a speech. It will be hollowed out by precedent. And if, on the other hand, Ukraine emerges in 2026 with a settlement that is genuinely defensible, one that does not invite a rematch, one that provides long-term security, serious enough to unlock reconstruction and investment, then the west will have shown that deterrence is still possible, that alliances still mean something, and that rogue powers cannot simply outlast democratic attention spans.

Ukraine will be the big story of 2026. It will tell us whether the western alliance that largely sustained international stability for 80 years can persist into a harsher century, or whether we are watching the unraveling of a historic arrangement in real time.

[11:00:06]

The tragedy is that the choice is not between peace and war. It is between a peace that prevents the next war and a peace that schedules it. Go to fareedzakaria.com for a link to my "Washington Post" column this week.

Thanks to all of you for being part of my program this week. I will see you next week.