Trump-Putin Bromance: Hot or Cold?
While the world carefully watches the actions of the recently inaugurated US President Trump, the burgeoning “bromance” between the incoming US president and Russian president Putin is certainly raising eyebrows and perhaps making US allies slightly nervous. Given the long and turbulent relationship between the two countries, and the fact that former KGB agent Putin has built his career on his hate of America, is there any hope of this unlikely pairing succeeding and building bridges? Or, as we expect, will it soon founder, based on the realities of competing geo-political interest in Europe, China, the US and, not least, Russia itself?
The story so far
During his campaign, President Trump referred to Putin as a man he admires and someone he could do business with. In return, the Russian leader has called Trump “brilliant” and was one of the first world leaders to offer congratulations following his victory. Together, they have spoken about relations between the two countries being “absolutely unsatisfactory” and communicated a united objective for a new relationship based on “equality, mutual respect and non-interference in the others “internal affairs”. Unfortunately, we do not believe this objective will be easily achieved.
Is there any hope of success?
There are indeed some very strong arguments for a renewed positive relationship between the West and Russia:
- The West’s attempts to stop Russia’s international ambitions via sanctions have failed miserably (instead, they have simply caused hardship in the Russian economy), so perhaps a new, more cordial approach might be more effective?
- The West has become more of a spectator than an active participant in Syria, giving Russia an opening to become kingmaker in Syria through aggressive military action. Better relations with Russia may therefore help the West regain some influence to help the region towards peace.
- Russia’s on-going use of sophisticated cyber technology to affect public opinion in Europe and the US is a threat to the normal functioning of their democratic institutions. Never has the saying ‘keep your friends close, and your enemies closer’ seemed more appropriate…
- President Trump’s hard-line stance against China over matters of security and international trade makes Russia a natural ally.
Taken together, these arguments appear to point to burying the hatchet, lifting sanctions and returning to a world of more cordial relations with Russia. But, sadly, things are a little more complicated and, despite the positive start between these two global leaders, a closer relationship is not going to emerge overnight.
Over before it begins?
First, let us look to the issues in the Middle East, and the on-going efforts to bring stability, security and peace to the region. It is not clear that bringing Russia back into the fold will result in any lasting peace in Syria, improve relationships between Turkey and the Kurdish people, put Lebanon on a more stable political footing or even improve the nightmarish developments in Yemen. The inherent religious tensions, dependency on oil and sheer brutality of the various regimes in the region will take decades to resolve, regardless of how the relationship between Russia and the US unfolds.
A closer relationship between Russia and the US could help the US in its trade and security dealings with China. However, the Chinese economy is roughly ten times the size of the Russian economy and China is the second largest holder of US Treasuries after Japan. These economic realities will be substantially more important than any developments in Russian-American relations.
In short, there is little reason to believe that these two political strongmen striking up a good relationship will end any differently than in the past. While their mutual appreciation and shared political and personal traits suggest they could become the best of allies, competing interests both domestically and abroad are a stark reality check and will most likely douse the flames of bromance before they get going. However, there may be some legacy from a thawing of the US Russia relationship. In particular, it increases the chances of the West removing sanctions against Russia. These sanctions have failed to coerce Russia to behave any differently on the international scene, and have largely proved to be self-defeating for the West. Given their ineffectiveness, perhaps the Trump Putin bromance is the catalyst needed to have them lifted?
Tal is a member of the APQ Global management team. He has 20 years’ experience working in the city, starting his career at Intesa Sanpaolo where he became Co-Head of Equity Structured Products. He has also worked at Morgan Stanley and GLG Partners.