A protester holds a banner depicting a playing card with portraits of Russian President Putin and U.S. President Trump (Reuters)
U.S. President Donald Trump and Russian President Vladimir Putin will meet in Anchorage, Alaska on Friday to try to end Russia's three-year attack on Ukraine.
On the eve of the meeting, Trump said he believed Putin was ready to agree to a ceasefire. However, he hinted that Putin and Ukrainian President Zelenskyy could "go their separate ways," which raised concerns among Kyiv observers.
Russian senior officials' statements indicate that Moscow is trying to downplay discussions about the war by linking it to other bilateral issues, particularly the resumption of economic ties with the United States.
On Thursday, Putin met with senior Kremlin officials to discuss the Alaska talks. He stated that he believed the United States was "genuinely trying to stop the fighting, end the crisis, and reach an agreement that serves the interests of all parties involved."
Earlier on Thursday, one of Putin's senior foreign policy advisors, Yuri Ushakov, briefed journalists on the preparations for the talks. He said, "Everyone is clear that the core issue of this meeting will be the resolution of the Ukraine crisis."
He added, "It is expected that both sides will exchange views on further development of bilateral cooperation, including in trade and economic areas." He noted, "I would like to point out that this cooperation has great potential, but unfortunately, it has not been developed yet."
Ushakov also announced that, in addition to Russian Foreign Minister Sergey Lavrov, the Russian delegation visiting Alaska includes Russian Finance Minister Anton Siluanov and Putin's special envoy for foreign investments and economic cooperation, Kirill Dmitriev.
The inclusion of Siluanov and Dmitriev once again indicates that the Kremlin hopes to discuss economic issues at the summit.
What is the state of U.S.-Russia trade?
In 2021, before the full-scale invasion of Ukraine, U.S.-Russia trade totaled $36.1 billion. This included $6.4 billion in U.S. exports to Russia and $29.7 billion in U.S. imports from Russia, resulting in a U.S. trade deficit of $23.3 billion.
As background, Russia was the 30th largest trading partner of the United States in 2021. Since then, following multiple rounds of sanctions imposed by the United States, trade between Russia and the U.S. has declined by about 90%.
Incidentally, after deciding to launch a military operation against Ukraine, Russia's overall trade balance—excluding trade with the U.S.—dropped significantly. Its current account balance fell by 70% from 2022 to 2023, reaching only $86.3 billion.
But looking back at 2021, Russia's trade surplus with the U.S. was almost entirely concentrated in commodities. Petroleum, minerals, and base metals such as iron accounted for about 75% of Russia's exports. Meanwhile, U.S. exports to Russia were mainly manufactured goods.
Is Russia's exports to the U.S. important?
In short, the answer is no.
By February 2022, when the war in Ukraine broke out, the U.S. was already the world's largest oil producer, with a daily output of 11.9 million barrels of oil. In the early 21st century, the U.S. completely transformed its energy industry through hydraulic fracturing and horizontal drilling techniques.
Russia has limited influence in certain energy products. It supplies certain grades of crude oil (especially Urals crude), as well as refined products such as vacuum gas oil (VGO), fuel oil, and naphtha.
Russian VGO is particularly important for U.S. refineries producing gasoline and diesel products because U.S. refineries lack sufficient domestic feedstock with the optimal chemical and physical properties.
Additionally, the U.S. still imports a limited amount of hexafluoride uranium, an important chemical used in uranium processing. Some U.S. utility companies have supply contracts with Russia, and at the time of the war, Russia supplied about one-third of the U.S. demand for enriched uranium.
However, similar to energy products, U.S. companies affected by Russian uranium supplies have adjusted their supply chains in response to sanctions. Moreover, companies such as X-energy and Orano have heavily invested in domestic uranium production in recent years.
Does Russia have any other leverage?
Since the imposition of sanctions in February 2022, most of Russia's goods have been transshipped to China from Western countries, including energy products and uranium.
Factually, Sino-Russian trade has grown during the sanctions against Russia. The common border, shared geopolitical perspective, and shared opposition to the U.S. have deepened bilateral relations.
According to data from the European Policy Analysis Center, Sino-Russian trade grew by nearly 30% annually in 2022 and 2023, reaching $240.1 billion. In 2024, Russia will rise from 13th to 7th place in China's list of trade partners.
During this period, China has provided more high-end products to Russia, such as advanced electronics and industrial machinery, while Moscow has solidified its position as Beijing's largest supplier of oil and natural gas.
Furthermore, the two countries regularly conduct naval exercises and strategic bomber patrols. The U.S. has expressed concern over joint military exercises and sees the China-Russia alliance as a threat to its global leadership.
Putin is certainly aware of these dynamics before the meeting on Friday.
What can Putin offer Trump?
In March this year, Putin's investment envoy Kirill Dmitriev claimed that Russia and the U.S. had started negotiations on a Russian rare earth metal project, and some U.S. companies had shown interest.
Dmitriev told the Izvestia newspaper, "Rare earth metals are an important area of cooperation. Of course, we have already started discussions on various Russian rare earth metal projects and other initiatives."
China almost completely controls the production of critical minerals used in everything from defense equipment to consumer electronics, which has led Washington to focus on developing its own supply.
The U.S. Geological Survey estimates that Russia has 3.8 million tons of rare earth metal reserves, but Moscow's estimates are much higher.
According to the Russian Ministry of Natural Resources, as of January 2023, Russia has reserves of 15 types of rare earth metals, totaling 28.7 million tons.
But even considering the potential errors in Russia's estimated rare earth supply, it accounts for only a small portion of the global stockpile.
Therefore, in recent months, the U.S. has been seeking "minerals for security" agreements with the Democratic Republic of the Congo and Ukraine to try to seize control of the global supply chain from China.
The U.S. may also attempt the same with Russia.
What does Russia hope to gain from these talks?
Since the start of the war in Ukraine in 2022, Western countries have imposed 21,692 sanctions on Russia, most targeting individuals.
Main sanctions on Moscow include a ban on importing Russian oil, price restrictions on Russian fuel, and freezing assets held by the Russian Central Bank in European financial institutions.
But on July 14, Trump threatened to impose so-called secondary sanctions, which would mark a significant shift.
Afterward, Trump targeted India, the second-largest buyer of Russian oil, increasing tariffs on Indian goods from 25% to 50% to punish its trade with Russia. So far, Trump has not imposed similar secondary tariffs on China, the largest consumer of Russian oil.
However, he indicated that China might face such tariffs in the future, as the U.S. tries to pressure countries to stop buying Russian crude oil, thereby forcing Putin to accept a ceasefire.
Members of the Trump administration also said that if the talks in Alaska do not go well, tariffs on India could be increased further.
Meanwhile, bipartisan U.S. lawmakers are pushing a bill—the 2025 Sanctions on Russia Act—which would also target countries purchasing Russian oil and gas.
The bill would grant Trump the power to impose 500% tariffs on any country helping Russia. According to reports, U.S. senators are waiting for Trump's approval to advance the bill.
It is expected that Putin will ask Western countries to ease sanctions on Russia in exchange for Moscow agreeing to any peace deal in Alaska.
Sources: Al Jazeera
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