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The Eurasia Group last week released their Top 10 Risks for 2015. We spoke to the group’s president Ian Bremmer to find out what this means for the year ahead in trade.

It seems that for those in the trade space, the geopolitical risk situation is tenser than it has been for many years?

Yes, in terms of geopolitical risk, the environment is becoming much tenser. It’s happening, in part, in spite of the rebound in the US and, in part, because of the rebound in the US. The economics do look better, globally. In Europe, they’re much better than they were during the eurozone crisis, much better in the US. And even though there is a slowdown in China, it’s happening with the approval and intent of the Chinese government. But the geopolitical environment is much riskier, yes.

Many of the risks will probably have more impact on investment and confidence than trade itself. But there seems to be a few which would have a drastic effect, namely the situations in Russia and China. What are the main dangers you see from Russia?

Russia would be the most disruptive and potentially the most volatile. These are not economic decisions, but political decisions. The US is putting significant sanctions on the Russians with the intention of punishing Putin directly. Putin absolutely understands that and intends to react and escalate in response. It is happening in the context of dramatically low oil prices, breaking US$45 today (13 January), which puts more economic pressure on Putin, but not political pressure, because he has a lot of support domestically. But that support comes from a very tough policy on Ukraine, the annexation of Crimea and the demonization of the US and some American allies.

In the context of all of that, there are some European nations that are trying to get out of the sanctions regime, like France, the Visegrád states like Hungary and Czech Republic and some peripherals, but not the Germans. And of course the Germans have just been on the end of a cyber-attack from Russia, on their government website. So this is absolutely escalating.

Trade between the US and Russia is not very meaningful, between the EU and Russia it’s very meaningful, and between China and Russia it’s going to become much more meaningful. So we’re seeing a dramatic shift. Many countries are thinking very differently about the world, hedging in their strategies and alliances. Russia has truly changed course. The relationship between Russia and the US is broken and the one between Russia and China is becoming a strategic alliance, in which the Russians are very much a junior partner.

You mentioned in the list the sheer number of countries that are dependent on China, which is the biggest trade partner of more than 100 nations. Do you expect it to become even more dominant in the trade space?

I think it will become more dominant in the trade space, but largely bilaterally. The US is primarily either a universalist or a multilateral player. It has coalitions of the willing, economically, and we certainly see that with the Trans-Pacific Partnership (TPP), which I believe is one of the Obama administration’s priorities, and one of the few which will come to fruition.

I think it matters a lot for the Americans, even more for many of the countries in Asia. In Vietnam, you might see an increase in GDP of 10% on the back of TPP. That’s extraordinary. With China, the increase is all about dramatically improved commercial ties, which gives the Chinese both political and commercial leverage and, eventually, security leverage, over many countries. Clearly that base of countries will grow very quickly over the coming years. That’s mainly in Asia, but expect to see it rising in Sub-Saharan Africa and some of the other emerging markets more broadly.

China made something of a play at multilateralism at the Asean Summit last year, when it attempted to escalate the development of the Free Trade Area of the Asia Pacific (FTAAP) – its own rival to TPP. Does that tell you that China realises that when it comes to trade, it needs to be more multilateral in its outlook?

I suppose that’s true, but I would still say that despite the efforts of China to work on multilateral agreements, when you look at how they actually behave, you’re seeing an awful lot of China directing capital, investment dollars, projects and the rest, at individual countries, and the conditionality being very much about those individual countries.

I don’t think we’re going to see China supplant or threaten, or challenge as equal competitors US initiatives – whether we’re talking Nato or the FCO on the security side, or a response to the TPP. I think the Chinese are more oriented bilaterally. As the world’s second biggest economy, they do better bilaterally, because they’re bigger than everybody else. If they use multilateral efforts their influence will be whittled down and weakened.

When it comes to security issues, China doesn’t try to work out its disputes with other nations in the multilateral environment, or even in an alternative multilateral group to the US. It tries to work things out individually, with the Vietnamese, Indonesians or whoever. And they’ll squeeze them individually. That’s where we’re going to see the Chinese moving.

With the relative, albeit very well managed slowdown in China, how much strain is that placing on an already volatile commodities market, with particular reference to energy?

I think there are two different stories, the oil price and the commodities story. Oil has historically been very volatile. You have a lot of countries out there that are major producers, enormously dependent on it, but they also understand how quickly the swings can run. There’s a level of appreciation and capacity to deal with the dramatic changes, that’s certainly true in the Gulf States and Russia, but it’s less true in Nigeria and Venezuela because they’re so badly managed. But I don’t see the dramatic reduction in oil prices causing drastic political uncertainty in the near term – even in Venezuela, where the Chinese have just offered $20bn in additional investment to help float the economy.

I am worried about the potential for the Russians escalating as a consequence of this, that’s the biggest downside. The biggest upside, it’s good news for the average consumer. It’s good news for the US economy, for the taxpayers. It helps to salve some of the problems going on in Europe and Japan. And it’s a great advantage for Xi Jinping, who gets to benefit dramatically, by getting to smooth some of the hurt that would be experienced by state-owned enterprises and resource intensive areas of the Chinese economy, because at exactly the same time, he’s taking resources away from them.

The slowdown in China is likely to be seen in heavy manufacturing and production intensive areas. With the oil prices, I don’t think this is now a massive risk in the near term, but it’s a big problem for the countries that are exporting to China. For Brazil, Sub-Saharan Africa, Australia, Thailand and the rest, this is a big issue.