“The so-called “phase one” trade deal inked in December 2019 by former President Donald Trump and Chinese President Xi Jinping might have put an end to the spiraling trade war between the two countries, but the agreement did not result in China buying more American goods, as both leaders promised it would. In fact, during the two years covered by the deal, China imported fewer American goods than before the trade war began—meaning that the deal did not even succeed at patching up the damage caused by Trump’s bellicose trade policies.”
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“We now know that the promised benefits did not materialize. But the costs certainly keep adding up. Auto manufacturers, for example, shifted supply chains to avoid the cost of tariffs and economic uncertainty created by the trade war—by relocating some American manufacturing jobs to China, which has become a large and growing market for auto sales. BMW, for example, shifted much of the production of its X3 sport-utility vehicle from Spartanburg, South Carolina, to China after reporting that tariffs had cut the company’s American profits by about $338 million in 2018. The higher costs imposed by the trade war caused Tesla to announce that it was “accelerating construction” of a new plant in Shanghai.
Overall, Bown estimates, exports to China would have been $26 billion higher in 2020 and $39 billion higher in 2021 if not for the impact of the trade war and subsequent trade deal. That doesn’t account for other losses sustained during the trade war, like the increased farm subsidies paid for by American taxpayers and the run-of-the-mill cost increases created by tariffs.
Aside from some positive developments with regard to China’s treatment of intellectual property and financial services, probably the only good thing about Trump’s “phase one” trade deal is that it has now expired.
“President Trump’s trade war and phase one agreement did little to change China’s economic policymaking,” Bown concludes. “Beijing seems intent on becoming more state-centered and less market oriented.””
“The 2014 penalties were narrower in scope and failed to deter Putin from further land grabs. Now, administration officials say they learned key lessons. Among them: They needed to share more information with the Europeans in advance and to work together on aligning their reaction for maximum impact.
“We were more resistant to doing that in the [Obama] administration, for all the obvious reasons of trying to protect sources and methods,” a senior Treasury official said about intelligence sharing. “But being able to do that, to find a way to get the information to our friends and allies, was critical.”
That strategy was made easier by the fact that Biden administration officials now overseeing sanctions became thoroughly familiar with the nuance of sanctions policy during Russia’s last military campaign and developed extensive relationships with their European counterparts.”
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“The U.S. took pains to carve out Russian energy as much as possible from the punishment, in part because any direct actions focusing on oil could result in higher global prices — and thereby even help the Russians, but also in recognition of Europe’s dependency on Russian oil and gas. U.S. officials also worked with allies and major natural gas producers to ensure that Europe would have adequate energy supplies if Putin decided to cut off shipments that flow through Ukraine.”
“The logic of mutually assured destruction that defined the Cold War still works, to some degree: Russia’s arsenal makes any direct intervention in Ukraine riskier than any rational American leader could tolerate. In a sense, then, Russia’s nuclear weapons make it less likely that the conflict will kick off World War III.
But in another sense, Russia’s nuclear arsenal also helped create the conditions where Putin’s invasion could happen in the first place.”
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“Russia can be relatively confident that the United States and its allies won’t come to Ukraine’s defense directly, because such a clash carries the threat of nuclear war. This could make Putin more confident that his invasion could succeed.
Putin himself has suggested as much. In his speech declaring war on Wednesday night, he warned that “anyone who would consider interfering from the outside” will “face consequences greater than any you have faced in history” — a thinly veiled threat to nuke the United States or its NATO allies if they dare intervene.”
“Putin’s remarks were a stark reminder that nuclear weapons aren’t just the boogeymen of a bygone age, but remain a key part of the security order that emerged after the end of World War II. By Kristensen’s count, Russia has about 6,000 nuclear weapons and the United States has about 5,500. Either nuclear arsenal is large enough to kill billions of people — but also to serve as a deterrent against attack.
In recent decades, the so-called nuclear order has remained fairly stable. The seven other countries known to have nuclear weapons have much smaller arsenals. Most countries in the world have signed onto the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which limits the development of nuclear weapons.”
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““I’m more worried than I was a week ago,” Kristensen said. He pointed out that NATO increased its readiness levels for “all contingencies” in response to Putin’s speech, and with increased military buildup comes increased uncertainty. “That’s the fog of war, so to speak,” Kristensen said. “Out of that can come twists and turns that take you down a path that you couldn’t predict a week ago.”
When asked about Putin’s decision to place his nuclear forces on higher alert, Kristensen said, “There is nothing in Russia’s stated public nuclear doctrine that justifies this.” He added, “Putin has now taken yet another step that unnecessarily escalates the situation to what appears to be a direct nuclear threat.””
“It may be easy to forget today that after Russia emerged from the ruins of the Soviet Union, the U.S. and Europe spent years working to integrate it into a new post-Cold War order. Far from triumphalist vengeance (as the Kremlin would have the world believe) the West provided Russia with substantial financial and technical assistance. All European states, including Russia, as well as the United States and Canada signed multiple agreements pledging to uphold key principles, including refraining from the threat or use of force; renouncing any change of borders by force; and affirming the right of all states to choose their own political and economic systems and security alliances.
Notably, Russia signed the Budapest Memorandum of 1994, which guaranteed Ukraine’s sovereignty and territorial integrity with the international borders in effect at that time, in exchange for Ukraine giving up the third-largest nuclear stockpile in the world. In 1997, NATO and Russia signed the “Founding Act” establishing a Permanent Joint Council and identifying a number of areas where the western alliance and Russia would work together to strengthen security — an “alliance with the Alliance,” as some of its architects in the Clinton administration put it at the time.
Things started to change in the late 1990s and early 2000s. Russia was not happy with the NATO-led war in Kosovo, nor with President George W. Bush’s decision to invade Iraq in 2003. Putin became president of Russia in 2000 and declared his intention to restore Russian greatness. At the time, many Russians and international observers – including some in the Bush administration – welcomed his words. Coming on the heels of a decade of what many saw as wild-west capitalism, corruption, and breakdowns in law and order, Putin seemed poised to make a necessary correction that would strengthen Russian stability and modernization without doing major damage to its democracy.
In hindsight, however, we can see that what Putin meant by Russian greatness was not strengthening the rule of law and building up Russia’s economy and international stature in the world. Upon taking office, he methodically went about rebuilding the Russian military, modernizing and expanding Russia’s nuclear arsenal, reviving and expanding Russian intelligence services and activities. That in itself was not necessarily a problem, except that Putin also started dismantling the nascent Russian democracy: taking control of media outlets, consolidating state industries and undermining opposition to his United Russia party, including by assassination of political opponents. Putin didn’t just tame the oligarchs of the 1990s; he replaced them with his own. He was creating something resembling a Soviet system of Communist Party control, just without the Soviet ideology and a personal structure of rule in place of the old Party nomenklatura.
A clue to his thinking came in 2005 when he described the collapse of the Soviet Union as the greatest tragedy of the 20th century. Then, in 2007 at Munich, that shift in rhetoric became unmistakable.
Following the speech, Putin matched his words with actions, dismantling the structures designed to keep peace in post-Cold War Europe. Russia formally announced in July 2007 that it would no longer adhere to the Conventional Armed Forces in Europe Treaty. It continued to reject the principle of host-nation consent for its troop presence in Georgia and Moldova, and began ignoring Vienna Convention limits on troop concentrations, exercises and transparency.
In 2008, Russia invaded Georgia, trading its peacekeepers in the regions of Abkhazia and South Ossetia for regular military personnel, and driving tanks toward the capital, Tbilisi. Six years later, Russian operatives took over Crimea and rapidly orchestrated its illegal annexation by Russia. Russia followed up with attacks in eastern Ukraine and continues to engage in low-intensity fighting and to occupy parts of Donbas to this day. Later, Russia violated the INF Treaty and began to deny overflights requested under the Open Skies Treaty.”
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“we must understand what Putin has been openly telling us. This requires recognizing that the playbook created in the 1990s, fitting and well-intentioned as it was at the time, needs to be replaced with a new approach that treats Putin’s Russia as a threat to peace and an adversary. And we must sustain such a new approach for as long as Putin remains in power.”
“The latest package would issue sanctions on two major Russian banks and on the country’s sovereign debt, meaning it can no longer raise money from the West and trade new debt on U.S. or European markets, the president said. Starting tomorrow, the U.S. will also impose sanctions on Russian elites and their family members, he added.
Biden called the moves “the first tranche” of punitive measures the U.S. is prepared to take, and he said they would go far beyond the steps the U.S. and its allies took in response to Russia’s invasion of Crimea in 2014.
“This is a flagrant violation of international law, and it demands a firm response from the international community,” he said of Putin’s decision to send Russian forces into the territories.
Biden also said the U.S. would continue to provide defensive assistance to Ukraine in the meantime, and said he has authorized additional movements of U.S. forces and equipment already stationed in Europe “to strengthen our Baltic allies — Estonia, Latvia and Lithuania.””