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    How Vladimir Putin plays his “Trump-Card”

    June 2018

    According to the American intelligence community, Mr. Putin helped to elect Mr. Trump to be the next American President.

    Mr. Putin’s plan, his objectives have been plain and simple from the beginning: to restore Russia to global greatness at the expense of the United States and to divide Europe by weakening NATO and the European Union. The Russian leader knows too well that America’s global power rests not only on their military and economic might but also on their unrivaled network of alliances have ensured that America’s strength and influence are magnified. Accordingly, Mr. Putin seeks to drive wedges between the United States, and its closest partners, to strain and ultimately rupture its alliances.

    As Mr. Putin in my opinion is calling the shots, he would ensure that America’s as well as Mr. Trump’s reliability is doubted, its commitments broken, its values debased and its image tarnished.

    The “Art of the Deal” comes into play by utilizing the “Trump Card” of follows:

    First, withdraw from the Trans-Pacific Partnership, the trade agreement the United States negotiated to bolster its economic and strategic position in the Pacific, at the expense of China and Russia. Then, pull out of the Paris climate agreement, becoming the only country in the world absent from this landmark accord.

    Second, criticize NATO and cast doubt on America’s willingness to defend its allies on the grounds that they haven’t paid their part of the bills (when that’s not how NATO works). Simultaneously, corrode the European Union by – lauding Brexit; sending Stephen Bannon to stake European anti-establishments movements; and undermining Europe’s most powerful country, Germany, most recently through installing a right-wing flamethrower as the new ambassador.

    Third, for the coup de grâce-start a trade war with the US closest allies. Impose steel and aluminum tariffs on Canada, Mexico and the European Union with the threat of auto tariffs to follow so that, according to reputable economists, both the United States and its allies’ economies are going to suffer. Justify the penalties on the preposterous grounds that allies threaten United States national security. Do so after withdrawing from the Iran nuclear deal, following months of stringing our European partners along with the hope that the US might agree to augment aspects of the pact. Then threaten sanctions on European companies for abiding by the deal, which has worked as intended.

    Incredulous that America would treat Europe with such disdain, the president of the European Council, Donald Tusk, dismissed the United States, saying, “with friends like that who needs enemies”. The usually unflappable Canadian prime minister, Justin Trudeau, finally gave up trying to cajole President Trump and declared the tariffs “insulting and unacceptable” and “an affront” to the thousands of Canadians “who have fought and died alongside American comrades in-arms”.

    Japanese Prime Minister Shinzo Abe, who has worked harder and longer than any foreign leader to make nice President Trump, still faces United States trade penalties despite Japan’s critical role in North Korea, playing several rounds of golf with Mr. Trump and making personal pleas to exempt Japanese producers from the sanctions. Japan is a great example for Trump’s trade balance phobia which as it seems to be neither Trump nor his administration has so far understood. Since Donald Trump’s election, US officials have been complaining about America’s bilateral trade deficit with many countries including Japan. But history shows that this is the wrong way to assess the economic relationship between two nations.

    In the 1980s and early 1990s, Japan was the country with the largest trade surplus with the US, causing heated trade disputes. Since then, however, Japan has transformed its trade and investment with the US, creating a solution that has benefited both economies. Japanese corporate investment in the US has soared from 1980 to 2017, creating jobs in all 50 states. Japanese companies employ about 860,000 people in the US Keidanren, the Japan Business Federation, estimates that the total number of jobs created by Japanese companies in the US reaches almost 1.6million if indirect effects are included.

    So why are US officials concerned about the trade deficit?

    It cannot be because of loss of jobs or income for Americans. Japanese companies operating in the US pay their employees an average salary of 84,000 US-Dollar per year, among the highest wages paid by US-based subsidiaries of multinationals from major investing countries. That means –Mr. Trump- their annual wages total around 72billion US-Dollar.

    At the same time, US companies operating in Japan employ around 380,000 people and pay total annual wages of about 26billion US-Dollar. Finally Japanese companies generate 480,000 more jobs for American than US companies do in Japan and they pay 46billion US-Dollar more n annual wages. That is a striking difference. Now let us compare those figures to the US trade deficit with Japan. Last year’s deficit was 69.7billion US-Dollar. If the US closed that deficit to zero, American workers would take home only a small fraction of the extra revenue, because labour cost account for just part of total sales. That share would be dwarfed by the wages generated by Japanese investment.

    The heart of Mr. Trump’s “Make America Great Again” agenda is to boast the prosperity of the US. So creating more jobs and higher incomes for the American people ought to take precedence over simply balancing the trade deficit for the sake of making the numbers look better.

    The US, Mr. Trump and his administration in my opinion is wrong to obsess about its trade deficit with Japan and the rest of the world, and is making things worse by levying tariffs on its allies’ products. Mr. Trump’s insistence that a country with a trade deficit is a loser would lead to the reversal of more than 25 years of progress that have seen hundreds of thousands of jobs created for American workers through international investments.

    Rather than pointing fingers, we should all be working together to stimulate innovation by harnessing technology and protecting intellectual property rights.

    Finally, for completeness, Mr. Putin might encourage the president to ensure that countries large and small revile America’s leadership, suggesting he:

    Disparage African nations and Haiti with a vulgarity; call Latin American migrants rapists and criminals; halt most refugee admissions; ban Muslims from several countries from entering the United States; restrict legal immigration; and separate children from their parents at the border.

    With the sum of these actions, President Trump has deeply angered US closest allies and offended almost every member of the international community, except Israel, Saudi Arabia, the United Arab Emirates – and Russia. Meanwhile, Russia is ascendant in the Middle East. The European Union is reeling – with Italy, Slovenia, Austria and Hungary now led by populist nationalists who embrace Mr. Putin and wish to terminate sanctions against Russia for its invasion of Ukraine. NATO’s unity is similarly strained, provoking concern about its collective will to counter any new Russian aggression.

    All good for Mr. Putin and no one else.

    Four years ago, after the Ukraine invasion, the United States led the charge to throw Russia out of the G-8. Even that decision – before leaving to Quebec – Mr. Trump announced to start to reconsider according to reporters.

    This weekend, leaders of the G-7 nations, including President Trump, are meeting in Canada, in a climate of such bitterness that the French finance minister termed the gathering the “G-6 plus one”. In reality, it’s the “G-7 minus one”, since President Trump has so alienated the United States from its core partners that the US has effectively absented themselves. America stands alone, weakened and distrusted. Without United States leadership, the G-7 can accomplish little. And, when next US needs its allies to rally to fight terrorists, place sanctions against North Korea, combat a pandemic or check China and Russia, will they join the US after the US has so disrespected them?

    There is for sure no evidence that Mr. Putin is dictating American policy. But it’s hard to imagine how he could do much better, even if he were.