Last year JPMorganChase launched its Center for Geopolitics, a client advisory team staffed mainly by former senior policymakers. The Center was created to provide real-time analysis and to complement the bank’s traditional research efforts at a moment when its clients are forced to confront a variety of new challenges including supply chain disruptions, military conflicts, and the rise of AI. “We face the most perilous and complicated geopolitical and economic environment since World War II,” Chairman and CEO Jamie Dimon wrote in a letter to shareholders. 

The Center is led by Derek Chollet, a veteran of the State Department, the Pentagon, and the White House who held senior posts in both the Obama and Biden administrations: Assistant Secretary of Defense, under Secretaries Leon Panetta and Chuck Hagel, Counselor of the State Department, and Chief of Staff to the Secretary of Defense. In his early career, Chollet assisted in researching and writing the memoirs of prominent foreign policy practitioners, including former Secretaries of State Warren Christopher and James Baker, and Deputy Secretary Strobe Talbott. He is the author of several books of his own, including The Middle Way, The Long Game, and The Road to the Dayton Accords.

I sat down with Chollet to discuss the impact of ongoing wars in Ukraine and the Persian Gulf, the future of American military alliances, and JPMorgan’s approach to geopolitical risk. What follows is a transcript of our conversation. 

CB: Why did JPMorganChase decide to establish the Center for Geopolitics last year? It's not the only bank that has done this. What inspired this decision? And then, how are you interfacing with your clients?

DC: Jamie Dimon, both last year when we did our rollout and then just in the last few weeks as we've put out our one-year-anniversary compendium of “greatest hits,” wrote a note that talks about the rationale he brought to it. It came from a conversation that started with him and other senior leaders here at the end of 2024, when they saw an insatiable demand from clients in the United States and around the world — from all of our lines of business, whether it's the private bank, the commercial and investment bank, or the consumer bank — to better understand what's happening in this complicated time we're in.

It seemed pretty compelling back then, at the end of 2024, and events since then have made it more so. I've been struck by how, in surveys our bankers do with their clients, geopolitics ranks number one, two, or three among their concerns across the board. And it makes sense, given that we've got two important strategic arenas for the United States, for our economy and our security — Europe and the Middle East — where we have sustained conflict in both places. And in Asia and around the world, we have a defining relationship between the US and China. On any given day, there's something in the news that's geopolitical in nature and impacting markets. We're living at a uniquely historic moment — we haven't dealt with this combination of issues all happening at once since the 1930s. So it's understandable why, for many clients in the United States and around the world, it's on their minds: where is the world headed, what does it mean for us, for our countries, for our companies, for our investments? Our job is to work alongside our banking colleagues to help these clients navigate the landscape.

CB: And what specifically is the Center producing for your clients? Are you strictly producing the reports you've made public, or is it more involved than that?

DC: It's engaging with clients across the board. Since we started, we've had hundreds of engagements with clients all around the world — one-on-one engagements, large group engagements, large conferences we participate in. In addition, we have written products, some of which are available on our website, and some of which go only to our clients — not widely distributed publicly, though they still reach many clients. So it's a combination of those two things. What we try to do is not just give a news digest or tell people what happened, but tell them why something is happening, why it matters, and offer some forecasting on what's coming next.

In doing that work, we're a small team, so we work closely with our colleagues in research as well as in the risk operation to help serve clients' needs. Internally, I think of us as a force multiplier — like special operators in the military. You're there working alongside your colleagues to enhance their efforts, giving them added bandwidth and resources to serve clients. J.P. Morgan is a company with global reach and a tremendous amount of resources, assets, and expertise, so we're here to tap into that and be a central node for the firm.

One closing observation: as I've gone around the firm meeting almost all the senior leaders here, for most everyone, geopolitics has been their second or third job in addition to their primary job. Our team goes to bed at night and wakes up in the morning thinking about geopolitics. So we're here as a service to our colleagues, but also, importantly, to our clients as they're seeking more insight into what's going on.

CB: I always like to ask people who consume large quantities of information and have to forecast and extrapolate from it — how do you identify quality information from low-quality information? Where do you go for your information?

DC: It's a great question. One of the things we're helped by is that I and our team have a lot of experience — we've been in government, in the trenches, working these issues. Obviously we no longer have access to that information, but our ethos is: we read everything so our clients don't have to.

I consume a lot through the press — following very closely in the US and around the world, in all its forms, whether Substacks or mainstream media. There are several good Substacks, though many of them are more niche than broad-brush "here's what's happening in the world." It's more like: I want to follow someone who's really smart on China, who speaks Chinese, and I learn a lot from them about China, which I can then put together with everything else I'm absorbing.

We also spend a lot of time talking to people in the US and around the world — myself and the team are still very much on the policy circuit, learning from former colleagues and other experts about how they see things. And then there's what J.P. Morgan itself brings to bear. I'm humbled by the amount of information and resources J.P. Morgan puts out — much of which I paid far too little attention to when I was in government; I should have paid more attention. In all our work, we try to leverage the good work of our colleagues who put out deep analyses of certain markets or sectors of the economy, and lift up what they're doing. I think we serve clients best when, say, in a discussion on Iran or events in the Middle East, it's not just us contributing — it's also our research colleagues doing commodities analysis alongside our experts on the US economy, so clients understand what's happening geopolitically, in energy markets, and in the US economy all at once.

CB: Scott Bessent told the Wall Street Journal earlier this year that the US-China relationship will define the success of the Trump administration. Where are we at this stage in that relationship?

DC: I think he's absolutely right, and it won't just define this administration — it will define geopolitics, not just the future of the US but the futures of many other countries around the world, which will be impacted by the trajectory of the US-China relationship.

At the end of September, President Xi is scheduled to come to the United States. So the US-China relationship has a healthy foundation to work from right now, as a result of the President's visit to China in May and President Xi's planned visit here in September. That follows a pretty rocky back-and-forth last year in the wake of Liberation Day and the US-imposed tariffs and China's retaliation against those tariffs — China was one of only two countries in the world to retaliate against the United States, the other being Canada. We're at a point of truce in that back-and-forth now. I don't think we've resolved any of the underlying issues or differences between the two countries, but we've at least arrested the back-and-forth over tariffs and counter-reactions.

CB: In terms of leverage — how far has China come in mitigating the leverage the US has over it, and vice versa?

DC: My assessment is that Beijing was among the least prepared for the first Trump administration, and they learned a lot of lessons from that experience. Then the Biden administration came in and largely continued many of the first Trump administration's policies on tariffs, export controls, and the strategic outlook of competition with China, including its military investments. So I think the Chinese were among the best prepared, if not the best prepared, for Trump 2.0, and they showed that last year in their retaliation — which also had the effect of being something of a Sputnik moment for the United States.

It wasn't a secret, at least to those of us who'd worked on the relationship from 2021 to 2025, that the US had built up a lot of vulnerabilities to China over the years, particularly in critical minerals and rare earths, and that China had effectively created an ability to weaponize those dependencies. They used those weapons last year. That's been a wake-up call, certainly for the US government and the private sector, in trying to reduce those dependencies, and I think progress is being made. It's an area where J.P. Morgan is contributing, helping finance and facilitate some important deals to help build reliable supply chains here in the United States, whether through resourcing, reshoring, or friend-shoring with more reliable partners. We're not there yet, but it's a fixable problem — there's money for it, there are government policies for it — it's just not going to be fixed in a year. It will take some time to reduce those dependencies.

CB: What would you say we've learned about China over the last few months as the war with Iran has progressed? Anything meaningfully new or surprising in how China responded — how they assisted Iran in evading sanctions, for example?

DC: For me it wasn't so much a surprise as a reaffirmation of what I've observed over the last several years: China is not particularly interested in actively playing a role in solving problems around the world. It's laser-focused on its goals of dominating global manufacturing and building dependencies — making the world more reliant on China and China less reliant on the world. There were some modest attempts, phone calls to try to de-escalate things, but you didn't see China playing much of a role at all in trying to resolve the crisis or bring it to an end.

There could be a couple of reasons for that. I think it's reflective of their strategic outlook, and also of the fact that they'd built up significant energy reserves that let them economically weather the storm in the Middle East more than expected, so they didn't have a real need to get in there and fix things. But more importantly, it's their strategic outlook — this just isn't something they see as their role in the world, now or for the foreseeable future. It's not consistent with their overall strategic goals for the country.

CB: On the impact of that conflict on the American alliance system — two points. First, our allies and partners in East Asia, who are much more dependent on Gulf energy suppliers, like Japan and South Korea — what lessons have they taken from this? Would you say those lessons translate to reduced trust in the United States? Second, the Gulf countries, where we have very involved security arrangements — we've already seen Zelensky visiting and signing parallel security agreements with the Gulf countries. What's to stop them from going to China for interceptors or other defense assets, given we've demonstrated we don't necessarily have the capacity to look out for their interests at all times?

DC: In those two regions, which have been directly and significantly impacted by the Iran war, I haven't seen evidence yet that it's fundamentally frayed alliances — with the huge caveat that we're still in the first half of this Iran conflict; we've got a ways to go, and a lot will depend on how it ends, whenever that is.

In Asia, I think the biggest lesson is less about US alliances and more about building greater resilience and diversification in energy sourcing, so countries are less reliant on Gulf energy. I haven't seen anything to suggest a meaningful impact on US alliances in the region, which remain pretty strong. That matters for US-China competition, because that competition looks quite different, and more favorable to the US, when measured as the US-plus-allies-and-partners versus China-plus-its-allies-and-partners, of which there are very few, if any. The Chinese understand that — they have a sophisticated understanding of the totality of American power, not just what the US brings on its own but what it does alongside its allies and partners.

In the Gulf, the picture is more complicated. This is a war the Gulf countries did not wish for — none of them were friends of Iran, but none wanted the conflict to unfold this way. In many ways it confirmed their fears that they'd end up targets of Iranian retaliation, which is what we saw. At certain points during the war, they've also felt they weren't adequately consulted — I'm not in government, so I can't say who's right or wrong there, but there have been some hiccups in those relationships. That said, they clearly still rely on the US for the bulk of their military power, and I expect military relationships across the board to only get stronger.

What we've seen in terms of the Gulf's ability to defend itself throughout this crisis is, in many ways, the fruit of something that's been growing for 15 years — deepening military-to-military cooperation between the US and Gulf partners, including integrated air and missile defense, with the US military as a central node. That's a big part of why the Gulf states haven't taken more damage than they have.

Is it true they're diversifying? Yes — if you want state-of-the-art counter-drone systems right now, you go to Ukraine, because the Ukrainians have been shooting down Iranian-made drones for three or four years. I think it's a good thing the Gulf countries are seeking to diversify some of their defense relationships. But overall, across the Middle East, I think the relationships, despite some hiccups, are fundamentally strong, and I expect US defense relationships to maintain that strength — and probably get even stronger — as this crisis plays out, which it will for a while.

CB: On the defense technology side — who do you see as the big winners, not just from the Iran conflict but from all the recent developments in warfare over the last five or six years: drones, ballistic missiles, and the response to them? I've been talking to a lot of people from companies like Anduril — the name of the game seems to be scale and increasing production volumes. What else do you see as a major upside in the defense sector as a result of these conflicts?

DC: Scale is a big piece of it — being able to produce attritable systems at scale. The unmanned space writ large is going to be critically important, along with the integration of autonomous technology and AI into that space. We've seen some of that play out in the Middle East and certainly in Ukraine — both theaters are, in many ways, incubators of cutting-edge defense technology. There's been a tremendous amount of work and thought given to how the US and its partners can promote greater innovation in the defense sector, improve procurement, move more quickly, and allow companies to take greater risk in their production lines. This is another area where J.P. Morgan is trying to do its part — through financing, facilitation, and advisory work, as well as in the policy space — to help militaries around the world, the US and its allies, get the systems they need when they need them, and bring that to scale.

There are a lot of real-time lessons we're learning, and more we'll learn in the coming years as we sift through how we got here. In many ways, Covid and Ukraine were the wake-up calls for the defense industry. Covid exposed the vulnerability of supply chains, known issues but which we all started actually experiencing. Ukraine exposed the challenges the US defense industrial base has had in replenishing the stockpiles we sent there. It uncovered vulnerabilities and weaknesses in the system that we'd had for decades but hadn't fully realized. When we burn through the bulk of a certain munition, we can't rebuild it at a satisfactory rate. We're learning that in real time today with Iran: when you burn through a thousand Tomahawks and it takes three years to build that back, that's not an acceptable result for a military facing the challenges it does.

CB: I wanted to pivot slightly to China's relationship with Europe. Where do you anticipate the trade relationship between China and Europe going in the next few months?

DC: I think the theme of de-risking that Europe has pursued for the last several years is, in many ways, a fulfillment of something the US was seeking for years. I remember going to Europe 10 to 15 years ago, meeting with European colleagues, and it was hard to have a common conversation about China, because the strategic debate here in the US about China was in a fundamentally different place than where Europe was. The US was still doing a lot of business with China — still does — but the sense of China as an emerging strategic competitor, the possibility of confrontation, just wasn't a conversation Europeans were having then. That started to change around that time, and changed fundamentally in the last five years. Europe hasn't really moved off that.

You still see significant internal debates all around Europe about overreliance on China, alongside recognition that China is a major market with important economic ties to Europe. It's not an on-off switch — either doing business with them or treating them as enemies and doing nothing. It's more nuanced than that, similar to the situation here in the United States. Is it possible China will seek to take advantage of turbulence between the US and Europe down the road? Perhaps — but I don't know that they'll necessarily succeed, given where most European governments currently stand on China.

CB: On that point — what kind of incentives does China have to offer Europe in that scenario, trying to pull them away from the US?

DC: Some of it would come into play if there's an increased tariff war between the US and Europe — China could take advantage of that, perhaps. But at the same time, Chinese manufacturing dominance is becoming a real issue for many European countries, and China's increasing dominance in electric vehicles is becoming a real issue for European car companies trying to compete. So China has leverage, and it has carrots to offer, but it's also presenting a set of challenges that I think will make many Europeans think twice about deepening their dependencies and reliance on China.

CB: In terms of the long-term US-Europe relationship, I guess there are roughly three scenarios: one where the status quo is more or less kept in place, one where there's a pivot to a more offshore-balancing posture, and one involving a hemispheric-defense-style withdrawal from Eurasia — over the long term, which of those do you think is most likely?

DC: I think the US-Europe relationship is actually better than it sounds. Just in the last few weeks there was a largely successful G7 summit hosted by President Emmanuel Macron, and the NATO summit accomplished a lot of good things on defense investment. Is there drama around the relationship? Yes. Will there be fundamental questions moving forward in Europe about American reliability? Yes. But Europe is spending more on its defense than it has in the past, for a number of reasons, and whatever those reasons, that's a good thing from my perspective. Europe is also looking to be more innovative in its defense spending. Despite the US largely pulling back from direct support of Ukraine over the last year and a half, Europe has filled the gap and done so with a large degree of success — where Ukraine stands today is first and foremost a testament to Ukraine's own innovation and resilience, but also to our European partners for stepping up in ways that may have been somewhat unexpected.

The US-European trade relationship, despite tariffs and the back-and-forth we've seen, remains the most important relationship the United States has. Will the US force posture in Europe change? Sure — that's something we'll continue to debate, and it's natural for any government to periodically assess whether it has the right capability in the right place. But I don't see offshore balancing, and I don't see hemispheric defense. I don't see a scenario where the US pulls out of Europe completely.

I think the real question, going back not just the last year and a half but really the last 20 years, is whether the US is reliable — whether we're going to be there for our partners. I'm old enough to remember debates in Europe 20 years ago about the US not caring about them because it was mired in wars in the Middle East, or during the Obama administration, about pivoting to Asia meaning pivoting away from Europe. There are always anxiety points in the US-European relationship, and we're at one of those points now. Some elements of it may be worse today than before, but I still fundamentally think the relationship remains quite strong. That said, you never take these things for granted — there's no divine right to success, and the alliances the US has weren't just ordained; they're relationships you have to work on. Maybe we're in a bit of marriage counseling right now, but we're still in the relationship, and still working at it.

CB: We rolled out extensive sanctions against Russia in 2014 and have expanded them considerably since. How much more room is there to give on US sanctions as a tool of coercion? How much further could we go before we start to undermine our own system?

DC: I think there's quite a ways to go. Depending on when this runs, we may by then have what's being informally called the Lindsey Graham bill move through Congress, which would further tighten the pressure on Russia and give the President greater authority to ratchet it up. I'd argue that one of the less fortunate byproducts of the Iran war was a modest boost it gave Russia — in order to keep energy markets stable, there was a temporary loosening of some sanctions that allowed more Russian oil onto the market, putting more money into Putin's coffers. But that was temporary and has since been rolled back.

I think there are more tools available, and they'll likely be used — probably by the time this runs. I don't foresee an investment environment in Russia becoming favorable anytime soon. Even if one were to wave a magic wand and resolve the Ukraine war in an acceptable way, providing grounds to lift some sanctions, Russia is in a pretty difficult place now and will likely remain there for some time.

One thing I'm keeping an eye on geopolitically, that isn't really on most people's minds right now, is a post-Putin Russia. There's more and more talk of internal pressure on Putin and questions about the Ukraine war. I don't foresee any near-term issue, but it's worth keeping in mind — Putin has been in power, one way or another, for 26 years now, and there isn't a clear sense of who comes next once he's gone. It wasn't that long ago — three years — that there was an attempted coup, when the Wagner Group made its "thunder run" toward Moscow before being repelled. So I think we could expect more uncertainty emanating out of Russia over the medium to long term.

This transcript has been edited for length and clarity.