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Article / 01 November 2016 at 13:02 GMT

US Election: Would a Trump victory be good for Russia?

Russia oil and gas expert
United Kingdom
  • During the campaign, Trump has said he would deal differently with Russia
  • A Clinton administration would probably mean escalation of anti-Russian rhetoric
  • Trump and Putin seem to share at least some views on the world
  • Recognition of Crimea and easing of sanctions would be clear political win for Putin
  • There are reasons to doubt that Russia would gain economically from Trump
Kremlin

Trump promises to make a deal with Russia, but will it help the US? Photo: iStock
 
By Nadia Kazakova

A couple of months before the Brexit vote, a story hit the British newswires. It proved to be an omen for the June referendum. The authorities (Natural Environmental Research Council) decided to run an on-line poll to chose a name for a new polar research vessel. 

The public decided (by majority of the on-line vote) that the ship should be named “Boaty McBoatface”. In the event, the democratic choice was rejected (it was advisory) in favour of something more reasonable. The new vessel will be called RRS Sir David Attenborough.

The story comes to mind with the approaching US elections. If the majority of the US electorate wants a president called Donald Trump, so be their democratic choice. Nothing would convince them otherwise, even if Mr. Trump sprouts a pair of horns or starts conversing in native Russian. 

I doubt that Donald Trump's supporters care much about his views on Russia or the Russian president or, as the Democrats now claim, some explosive information held by the FBI on Trump's links with Russia. For Trump voters, it is all part of a liberal conspiracy. 

And I doubt that Hilary Clinton's campaign to paint Trump as the Kremlin's puppet makes more than a marginal difference to her electoral chances. These marginal voters are those who hate Putin more than than hate Clinton.

As in the Brexit campaign, the Russian threat might not be more than a distraction. Post election, however, it would be another matter. 

Putin cups
Trump's expected behaviour towards Russia is not everybody's cup of tea. Photo: iStock
 
A Clinton administration would probably mean escalation of anti-Russian rhetoric, a push for a no-fly zone in Syria (if it is still relevant early next year) and an uncompromising stance on Crimea and Ukraine. President Putin would respond in kind, with more showing of military strength here and there. He would continue to lament the hypocrisy of the Western world, while putting a lot of effort into getting a seat at their negotiating table. 

It would cement Russia's position as a worthy adversary to the US, a politically comfortable state of affairs both for the Putin and the Clinton administration. It would also mean no let up of anti-Russian sanctions and possibly their tightening. 

The old game of bleeding Russia into economic ruin could be truly back on. 

Not the most positive scenario for the Russian economy or rouble assets. 

A Trump presidency has a promise of a different kind of relationship with Russia. Trump and Putin seem to share at least some views on the world. 

Donald Trump believes that NATO should focus on fighting terror, and the US should roll back its spending on European defence.  Putin says that NATO is an outdated and unreformed institution. And he would not oppose NATO's rolling back its positions to where they have been in the early 2000s. 

Mr. Trump does not rule out recognising annexation of the Crimea and easing of the anti-Russian sanctions. Mr. Putin just plainly says that what happened in Crimea is a mirror image of what happened in Kosovo (in other words, Russia followed the West example), but without the bombing. He must be on the same page with Trump on sanctions. 

In his most recent speech at the Valdai Forum, the Russian president all but stretched his open hand to a future US president whoever it could be. It is obvious, however, that he might find it much easier to talk to President Trump than to President Clinton. 

Mr. Putin might be prepared to sit down and do a deal (as Trump suggested he would be prepared to do). If the deal is, say, for NATO to roll back from the Russian borders and the US to recognise Crimea and lift the sanctions, Russia could promise to tone down its military displays along the European borders. NATO could then focus on terror, and save the US a lot of money on patrolling now peaceful borders with Russia. 

The recognition of Crimea and easing of sanctions would be a clear political win for Putin. It could open up a path to a landslide in the next presidential elections. It would even make sense to move them forward to 2017. For the Trump administration, a deal with Russia could open up many business opportunities, and not only in property development. 

Such a scenario (after an initial shock of the Trump victory) might be positive for the Russian markets. With a couple of caveats. 

Any deal would take time and Trump might change his mind once in the Oval Office. It would not be too much a surprise, given than Trump's running mate Mike Pence has already played a bad cop to Trump's good cop on Russia (“…provocation by Russia need to be met with American strength”).

The other caveat is that lifting of the sanctions and subsequent strengthening of the rouble would be vigorously counteracted by the Russian central bank (with lower rates, buying FX into reserves). 

Mind you, the initial shock to global markets after a Trump victory could strike Russian markets much harder than others. Risk aversion, lower commodity prices and general sense of uncertainty and dislocation might mean heavy losses for Russian assets. 

It is only when the dust settles that markets might give any thought to a prospect of a pact between Putin and Trump. And as Trump makes America great again, would he still have the heart for a great deal with not-so-great Russia?
 

– Edited by Clemens Bomsdorf

 

Nadia Kazakova is a specialist on Russia, particularly the oil and gas sector


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