By Tass
MOSCOW, July 1. /TASS/. The US threatens Russian trade partners with sanctions, Donald Trump is rehashing global trade, and riots in Serbia may grow more violent. These stories topped Tuesday’s headlines across Russia.
Izvestia: Potential US tariff hike on Russian oil buyers could blow up in America’s face
A new US bill proposing the introduction of 500% tariffs on countries importing Russian oil and gas may trigger a new trade war and deal a serious blow to the US economy, experts polled by Izvestia say. They argue that the move would alienate important trade partners like India, China, Turkey and other BRICS countries, causing them to sever trade ties with the US. That said, the draft bill seems to be a tool Trump is using as political leverage against Russia.
The bill would give the US president the power to introduce such sanctions, but puts him under no obligation to do so, specified Igor Yushkov, expert at the Financial University and leading analyst at the National Energy Security Fund.
“Had Trump wanted to introduce sanctions, he could have simply issued an executive order. No separate bill is needed for this,” he said.
Yekaterina Kosareva, Managing Partner at WMT Consult, concurs. She pointed out that Trump previously chose not to back the G7 initiative on lowering the price ceiling on Russian oil from $60 to $45 per barrel.
“Had Trump wanted to put pressure on Moscow now, he would have agreed with the proposals put forward by his European partners. But he understands that this move would trigger a rise in oil prices, something he’s been actively fighting lately. And the introduction of tariffs against those countries that import Russian energy products could send global hydrocarbon prices soaring,” she believes.
“This sanctions blackmail serves as a lever of pressure against Russia. It’s a classic game of good cop, bad cop, where senators play the tough guy, and the Trump administration – acts like a friend. They are putting pressure on Russia, showing that if it continues to be stubborn on the issue of a truce in Ukraine, then hypothetically, the Trump administration could use this sanctions instrument. But in reality, the possibility of the proposal moving forward, which has only been floated by senators so far, is rather slim. There have been no statements endorsing it from the White House or the Department of State,” Dmitry Suslov, Deputy Director of the Center for Comprehensive European and International Studies at the Higher School of Economics, told Izvestia.
The bill in question also runs counter to recent US policy moves and is fraught with other geopolitical losses. The Trump administration has just concluded a temporary trade agreement with China and is close to an agreement with India, both close Russian allies and its partners in BRICS and the SCO. Trump would be unwise to rock the boat with these important trade partners.
“Imposing sanctions on India, for example, would alienate a key counterbalance to China and risk driving New Delhi into closer alignment with Moscow,” Konstantin Blokhin, a leading researcher at the Russian Academy of Sciences’ Center for Security Studies, told Izvestia.
CEO of the NAANS-MEDIA independent analytical agency of oil and gas sector Tamara Safonova believes that the five-fold tariff hike would lead buyers of Russian hydrocarbons to halt trade with the US, creating new global supply chains as these countries look for alternative markets for their products.
Russia currently accounts for about 11% of global oil exports, 28% of pipeline gas, and 10% of LNG shipments.
“If, hypothetically, Russia were to suddenly stop supplying these products to world markets, it would trigger a collapse opposite to what we saw during COVID, when global oil demand fell by a quarter virtually overnight,” she noted.
Vedomosti: Trump uses art of the deal to remake global trade
The US is in the process of concluding trade agreements with Taiwan, Indonesia, India, Vietnam and South Korea, Bloomberg reported. It has also made progress in talks with the European Union, although it is still unclear whether these will produce full-fledged trade deals or more limited arrangements that target specific issues. Meanwhile, Donald Trump has postponed the introduction of 50% tariffs on goods from the European Union until July 9.
It’s unlikely that the US will reach comprehensive deals with leading trade partners by this deadline, believes Head of the Department of Economic Research at the Institute for US and Canadian Studies Yevgeny Khoroshilov. According to the expert, the more likely scenario is that the sides will sign off on some framework agreements that could serve as a foundation for further negotiations. “A prolonged trade war with multiple key partners at the same time is not in the US’ interests. It would be costly for the US economy and Trump’s approval ratings, too. So, post-July 9, the situation may develop approximately along the same lines as previously: a lot of big talk by the White House, threats and deadlines, while behind the scenes, the not-so-easy talks continue,” the expert noted. That said, thanks to Trump’s trade policy, certain signs of rejuvenated investment in the US economy have already emerged. But even their intermediate result will only become clear closer to the end of the decade. At this point, the only thing that can be said is that Trump has destabilized the global trade system and personally contributed to the global economy’s fragmentation process, Khoroshilov believes.
There are contract partners with whom an agreement simply cannot be reached given the US administration’s current stance, said Maxim Cherkashin, junior researcher at the Center for North American Studies at the Russian Academy of Sciences’ Institute of World Economy and International Relations (IMEMO RAS). In his opinion, the EU is one of these partners. Trump’s negotiation strategy is to always leave the US an out to unilaterally leave a deal, something that does not inspire confidence among partners. Thus, Cherkashin thinks that this lack of trust makes clinching any comprehensive trade deals far-fetched.
Media: Protests in Serbia may intensify
Protest rallies in Serbia will continue and intensify, Chairman of Serbia’s Parliamentary Committee on the Diaspora and Serbs in the Region Dragan Stanojevic told Izvestia. According to him, the outcome of the unrest is dependent on whether the West seeks a regime change in the country. Mass rallies took place across the republic on June 28-29, ending in clashes with the police. The opposition has since declared that it would block roads and streets until all its demands are met, at the crux of which are the holding of new parliamentary elections and the release of arrested rioters. Meanwhile, President Aleksandar Vucic declared victory over the demonstrators on Sunday night, saying, “Serbia has won because Serbia cannot be defeated by violence,” as he refused to give in to their demands.