Vladimir Putin’s upcoming meeting with Donald Trump, a prospect many are describing as a stunning win for the Russian leader. This meeting will be historic in its own right, being on American soil for the first time since 2007. This first encounter, which will be held in Alaska, It’s a move that comes as the Russian economy is sinking under the weight of the international community’s punitive sanctions and skyrocketing inflationary costs. Economists and analysts suggest that the talks could bolster Putin’s war-centered economy, especially as Russia continues to make military gains in Ukraine.
The upcoming meeting, scheduled for later this month, would be a significant first in the complex history of U.S.-Russia relations. Here’s what the Kremlin wants to accomplish. The Kremlin intends to make the discussion all about the war in Ukraine. They’re all tirelessly pursuing possible diplomatic routes to a peace deal. Putin’s aide, Yuri Ushakov, recently acknowledged that discussions would address the conflict. This needless conflict has claimed tens of thousands of lives and handed millions of square miles of territory to Russia by default.
Economists such as Richard Portes are calling the meeting a huge PR win for Putin. He said, first, that the invitation to negotiate directly and without preconditions with a sitting U.S. president was a significant accomplishment. This positive positioning comes against a backdrop of enormous struggles. Yet in June, inflation surged to 9.4%, as international sanctions remain a steadfast wall preventing Russia’s economy from recovering.
“This is already a big win for Putin to be invited for the first time since 2007 to meet with the U.S. president on American soil. This is already a triumph,” – Richard Portes
Yet, even after all of this diplomatic progress, the Russian economy is still quite precarious. To date, Putin’s military has accomplished impressive operational success in Ukraine. The continued sanctions and falling oil revenues pose an enormous economic burden. Portes remarked on the dichotomy of Putin’s position: “On the one hand, from the economic point of view, he starts from a weak position. The Russian economy is not in very good shape.”
The geopolitical context around this particular meeting is especially complicated. To make matters worse, the U.S. has already warned Russia of possible secondary sanctions for its continuing oil purchases. Meanwhile, Ukraine’s President Volodymyr Zelenskyy has not been included in these talks, which has raised concerns among European leaders who advocate for Ukraine’s involvement in any peace negotiations.
European nations, particularly Germany, France, and Italy, are pushing for Ukraine’s participation in discussions, reflecting their commitment to supporting the Ukrainian government. Analysts have cautioned that leaving Ukraine out of negotiations threatens to undermine any sort of peace agreement. This exclusion undermines the nation’s sovereignty and security.
After the announcement that Trump would be meeting with Putin, European defense stocks fell following the news. The short list of Rheinmetall, Hensoldt and Renk saw their share prices fall. This reduction was primarily a result of unknowns about future military procurement and investment strategies as a result of changing geopolitical tides. Some analysts argue this could offer attractive buying opportunities for investors.
“The market, of course, has been discounting this some from time to time and as those [defense stock] names pull back a bit, you should buy on that weakness, in my opinion,” – Analyst commentary
He even claimed that a peace deal out of these talks would only reinforce Russia’s military strength. Simultaneously, in Europe it might raise defense budgets due to new threats identified. Granville stated, “Either way, it’s a winner.”
The very complexity of the U.S.-Russia relationship only adds to the difficulty of guessing what will happen over those two days. More sanctions are already poised to go into effect. Other analysts believe that Trump’s Nobel-Prize-winning aspirations would forestall all but short-term punitive measures against Russia.
“Can anyone predict what the President of the United States will do from one day to the next? It’s very difficult,” – Richard Portes