Skies Darken
This is a provisional post in a context of information overload and confusion. To what extent are Trump’s new tariffs a genuine attempt to get the rest of the world to pay for the US $36 trillion debt? To what extent does this constitute, as Trump claims, a bid for US economic independence? To what extent is all this theatre a bid to rake in as much as possible from the rest of the world so as to pay for an upcoming World War Three, starting with a strike on Iran?
In excluding Russia and Belarus from the new tariffs: is the US saying that it sees no further mileage in trying to punish these states; has some deal already been struck; is Trump trying proactively - by carrot more than stick - to push Russia to a quick deal on Ukraine and/or a commitment not to go to war over Iran? Or does Trump know that Lyndsey Graham is preparing the dirty work for him in the Senate (see below)?
My summary take: Russia is not going to be pushed into a quick deal on Ukraine. Reports from the battlefield suggest that Russia is not going to wait the full 30 days before retaliating against Ukraine for violations on striking energy targets: it may have just struck energy facilities in Kharkiv.
Russia is open to mediating between the US and Iran on the non-existent Iranian nuclear weapon program. Russia can take in Iranian stocks of enriched uranium if necessary. But of course this is all a phony issue anyway. What is at stake is US control over Iranian mineral wealth, establishing Israeli regional dominance, and allowing Israel to take over most or all of Lebanon and most or all of Syria, possibly parts of Iraq as well, and keeping Netanyahu out of prison while he exterminates the Palestians in Gaza and the West Bank.
Russia will not stand by and watch that happen. It’s resistance to the US may take the form of a major new offensive in Ukraine, already planned for May, or opening another new front elsewhere.
Nor can China stand by. If it has to, China will now show its hand because 40% of is oil comes from Iran. As it is already hinting, China may now implement a plan to re-secure Taiwan (which Taiwan may be relieved to see happen given the tariffs that Trump has just imposed).
Needless to say, the calculation of Trump’s tariff rates is complete hocus-pokus. Insane. For the past 25 years we have had an agency for regulating tariffs: the World Trade Organization; and the principal agencies of global economic relations - the World Bank and the International Monetary Fund - challenged as they may be by the Shanghai Cooperation Organization and the BRICS, are creatures of US hegemony.
Lyndsey Graham is attempting to build up support in the Senate to maximize pressure on Russia. On April 1st, U.S. Senators Richard Blumenthal (D-Connecticut) and Lindsey Graham (R-South Carolina) led 50 of their colleagues – evenly divided by party affiliation – to introduce primary and secondary sanctions against Russia and actors supporting Russia’s aggression in Ukraine.
In brief, Trump may not be seeking to inflict additional economic harm on Russia just yet, but there is a good chance the Republicans will do the work for him in any case if Russia doesn’t succumb to pressure on Ukraine. Russia won’t. Nor will Russia feel much pain because it has shown itself far more resilient than the collective West ever thought possible.
These Lyndsey Graham sanctions would be imposed if Russia refuses to engage in good faith negotiations for a lasting peace with Ukraine or initiates another effort, including military invasion, that undermines the “sovereignty” of US-controlled Ukraine after peace is negotiated (which won’t happen for as long as the US thinks it can wield the sanctions weapon with impunity). The legislation would also impose a 500 percent tariff on imported goods from countries that buy Russian oil, gas, uranium and other products.
It looks like both China and Russia will ignore any such threats of secondary sanctions and tariffs. Restricting sales of Russian oil on global markets will trigger increased inflationary pressures that will impact the US itself, at a time when inflation is already increasing in the US and in Britain and elsewhere, adding to the inflationary pressures of the tariff war, with a major uptick in prices in utilities and other things - as in the UK - while gas reserves in Europe have fallen to critical levels. We could see another energy shock by the Autumn and Winter.
Europe, meantime, while obstinately refusing to mend the flow of cheap pipeline oil and gas from Russia, and actually sabotaging such supplies further by having Ukraine stop the flow to Hungary and Slovakia, is stepping up imports of expensive LNG from Russia. Pure insanity. Hungary and Slovakia have been able to get compensatory supplies through TurkStream and from Serbia (with whom Hungary has just completed a military alliance).
The scope for harming Russia by sanctioning its oil and gas supplies is limited. Russian energy counts only towards 10% of Russian GDP and 20% of the Russian Federal budget revenues, representing a steady decline over the past few years as other parts of the Russian economy have been growing. The budget now benefits from more revenue from direct taxes than it used to do, given the overall robustness of the Russian economy. Russian inflation began to fall off significantly in March and is predicted to fall to 7% this year, and perhaps fall to 4% in 2026 - the result of the steep interest rate hikes imposed by the central bank.
On the Russian grain deal, it appears that the Americans in Riyadh on March 24 agreed to move to lift the sanctions on the Russian agricultural bank and on other Russian financial institutions and sanctions on exports of Russian foodstuffs and on Russian ships that deal with grain and fertilizer.
They provided the Russians some kind of documentary confirmation that added specific proposals as to how this relief could occur. Lavrov has said that Russia offered proposals as to how to circumvent European impediments, perhaps pointing to a possible bilateral deal between US and Russia that would circumvent European sanctions, possibly involving non-SWIFT payment mechanisms. The European sanctions will no longer be sustainable.
In Germany CDU/SDU voices are already saying it is time to lift the sanctions. Hungary, Slovakia and perhaps Italy will begin to veto attempts to impose new sanctions. Lavrov is optimistic that further progress will be made in an upcoming meeting between US and Russian teams in Istanbul.
Meetings this week between Wang Yi (Wang Yi) - Director of the Central Foreign Affairs Commission Office of the Chinese Communist Party - and Putin and Lavrov in Moscow point towards a firm consolidation of the Sino-Russian alliance, of their willingness to help Iran engage in indirect talks with Washington (perhaps in return for Russian and Chinese security guarantees, having Iran deposit its enriched uranium stocks in Russia), and there is talk about some kind of Western Eurasian security apparatus that could be a replacement for NATO, with or without the collaboration of Europe.
Russians conducted a massive drone and missile attack against Ukrainian positions yesterday amidst more Ukrainian attacks on Russian energy infrastructure (according to the Russian DM). Mercouris reports that the size of Russian Geran 2 drone attacks is increasing every day sometimes involving drone swarms, sometimes involving hundreds of drones. This is because production of these drones is increasing all the time - perhaps to one hundred or even one thousand of these each day. And the drones themselves are becoming more sophisticated.
On the battlefield there are further Russian advances in Kursk and in Sumy (including a village near the main Ukrainian supply road, which the Russians appear to have surrounded). It does now seem that the remaining Ukrainian positions in Toretsk have been overcome by Russian forces. But there are continuing reports of Ukrainian counter attacks in the area of Pishanne near Pokrovsk. An uptick in European weapons supplies may be helping here. Russia continues to make progress in Zapporizhzhia (as it continues its considerable westward movement from Kurakhove), south of the Dnieper (cutting the connection between Orekhiv and the city of Zapporizhzhia and perhaps of Dnipro).