ANDREW KOSENKO
MOSCOW: US President Donald Trump and his cronies are eager to normalize relations with Russia in exchange for lucrative oil deals. In doing so, they are advancing Russian President Vladimir Putin’s strategy of systematically isolating Ukraine by making its defense so costly that popular support for the country in Europe evaporates.
After more than four years of fullscale war, it is abundantly clear that Russia cannot win on the battlefield. When the Ukrainian government stood up to American pressure, the Kremlin concluded that it needed the Trump administration’s active involvement on Russia’s behalf.
The ongoing discussions about a return of US companies to Russia, led by Trump’s son-in-law Jared Kushner and Trump’s special envoy (and fellow New York real-estate baron) Steve Witkoff, reflect that effort. Using nebulous promises of fossil-fuel profits “after the end of the war” as a carrot, Putin is seeking to align Trump’s pecuniary interests with Russia’s strategic objectives, giving Trump a reason to declare the war over or, better yet, to force Ukraine to capitulate. Never mind the years of horrific conflict, untold war crimes, millions of people killed or displaced, and the generational trauma; Trump wants his cut.
What is baffling is that this bribe will not benefit the United States, individual American companies, or business executives. It may briefly enrich those in Trump’s orbit, but profits are unlikely to last in a country where murder and expropriation are a material business risk.
The Trump administration and some American executives fail to understand that, for the Kremlin, agreements and business deals are not opportunities for mutually beneficial cooperation. They are tools the Russian elite uses to hold the other side to its commitments while discarding its own obligations as soon as doing so becomes profitable.
Yet American investors and businesses have repeatedly fallen victim to these practices.
Many Western and East Asian firms operating in Russia have also been forced to sell their assets for token prices. Others have been unable to repatriate their profits or have been forced to surrender control of their operations. Carlsberg and Danone were forced to sell their Russian assets at below-market value, and ExxonMobil recorded a $4.6 billion write-down in 2022 after announcing its withdrawal from Russia. The Kremlin later transferred its stake in the Sakhalin-I oil field to a Rosneft subsidiary, though Exxon
Mobil has since signed a preliminary agreement aimed at recovering its losses. Many other companies— including Ford, Nissan, Mazda, Hyundai, Shell, Société Générale, and TotalEnergies—have suffered enormous losses.
Far from being an El Dorado of the East, Russia is a country of approximately 143 million people with degraded infrastructure and a stagnant economy propped up by unsustainable government defense spending. Given low incomes, it is hardly a lucrative market, and local oligarchs or members of the security services can and do “relieve” owners of profitable assets.
Yet the apparent quid pro quo is clear. In exchange for access to Russian oil and gas, the Kremlin wants an end to US sanctions, which it hopes will enable it to continue its war against Ukraine and Europe indefinitely. If Russia succeeds in bribing the right US officials to take its side, the focus will switch to Europe, which will then come under pressure to abandon Ukraine.
US officials participating in such transactions would likely become international outcasts, potentially making them even more dependent on Russia. The Kremlin cultivates such relationships.
Putin’s maniacal obsession with destroying Ukrainian sovereignty and erasing Ukrainian identity will not stop. But Ukraine has demonstrated its determination to keep fighting. Unable to break Ukraine, Putin will turn his aggression against Europe.
The Kremlin has already sharply increased its hostile activity across Europe. European security agencies and leaders are warning of significant Russian escalation within “months, not years.”
Trump’s betrayal of Ukraine will leave Europe to face Russia’s aggression alone, with the US potentially on the other side. And even if it fails, an attack on Europe will give Putin additional leverage to demand concessions and an opportunity to shift the domestic conversation away from his humiliating military defeat.
AndrewKosenkois AssociateProfessorofEconomics attheSchoolofManagement atMaristCollege. Project Syndicate