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Lifting of Sanctions Could be Costly to Russia
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Tweets on social media say Trump is about to lift the sanctions placed on Russia by the Obama regime. Being a showman, Trump would want to make this announcement himself, not have it made for him by someone outside his administration. Nevertheless, the social media tweets are a good guess.

Reports are that Trump and Putin will speak tomorrow. The conversation cannot avoid the issue of sanctions.

Trump during his first week has moved rapidly with his agenda. He is unlikely to delay lifting the sanctions. Moreover, there is no cost to Trump of lifting them. The sanctions have no support in the US and Western business communities. The only constitutuency for the sanctions were the neoconservatives who are not included in the Trump administration. Victoria Nuland, Susan Rice, Samantha Power are gone along with much of the State Department. So there is nothing in Trump’s way.

President Putin is correct that the sanctions helped Russia by pushing Russia to be more economically independent and by pushing Russia toward developing economic relationships with Asia. Lifting the sanctions could actualy hurt Russia by integrating Russia into the West. The Russian government should take note that the only sovereign country in the West is the United States. All the rest are US vassals. Could Russia escape the same fate? Anyone integrated into the West is subject to Washington’s pressure.

The problem with the sanctions is that they are an insult to Russia. The sanctions are based on lies that the Obama regime told. The real purpose of the sanctions was not economic. The purpose was to embarrass Russia as an outlaw state and to isolate the outlaw. Trump cannot normalize relations with Russia if he lets this insult stand.

Therefore, the social media tweets are likely to be correct that Trump is about to lift the sanctions. This will be good for US-Russian relations, but perhaps not so good for the Russian economy and Russian sovereignty. The Western capitalists would love to get Russia deep in debt and to buy up Russia’s industries and raw materials. The sanctions were a partial protection against foreign influence over the Russian economy, and so the removal of the sanctions is like removing a shield as well as removing an insult.

(Republished from PaulCraigRoberts.org by permission of author or representative)
 
• Category: Foreign Policy • Tags: Donald Trump, Russia 
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  1. I don’t think repealing the sanctions is going to hurt. Cancelling travel bans and asset freezes doesn’t hurt. Allowing services (like credit card transactions) in Crimea definitely won’t hurt. Cancelling bans on energy companies and banks shouldn’t hurt either.

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  2. Victoria Nuland, Susan Rice, Samantha Power are gone!

    Sweet sweet music to my ears.

    Read More
  3. Trump is beginning by setting most of the world on fucking fire and Roberts has his cultish idolatry set on Putin. Grotesque.

    Read More
    • Replies: @NoseytheDuke
    Wow tom, your first ever post here at unz and it's one I'm sure you'll always be proud of. Congrats.
  4. “The real purpose of the sanctions was not economic.” Correct and their impact on day to day trade was minimal. Most of them were directed at extreme nationalists in the Russian government, although the choice of people was sometimes bizarre and ill informed. The banking sanctions almost certainly had more impact than was originally intended. The degree to which the Russian agricultural industry depended on international credit brokered through Russian banks was almost certainly not foreseen. The tightening of credit from 90 to 30 days was an afterthought. The Russian FIRRE economy, the most credit sensitive part of the general economy went belly up after the oil price crash anyway and took a lot of weaker banks with it. The massive rise in interest rates and huge increase in security requirements (now typically 120% of the sum to be borrowed) were about the response to the devaluation. The contribution of sanctions there was trivial. Does anyone want to buy stranded assets, I have a few to broker? Shopping mall in Tver anyone? So, although under normal circumstances, the credit limitations would have been irritating, they were noise level after the oil crash. The main impact has been screwing up international direct investment in the Russian economy. Somewhere in most money handling chains there will be a sanctioned credit institution. Ford can handle that. Middle sized German firms can’t.

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  5. No, Trump won’t lift sanctions anytime soon. Wanna bet? I say sanctions gonna stay till mid 2018.

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  6. Sanctions have failed. The usually reliable Anatoly Karlin wrote that the Russian Economy had grown by 1% last year and would grow much higher this year. Diversification and Import Substitution have quickly nullified the effects of sanctions. This wasn’t meant to happen. The Russian Economy was meant to be so moribund that it would take decades to achieve this.
    Rather like the Russian Total Fertility Rate. In Europe, it’s now second only to Iceland.
    Even if all barriers were removed, lots of markets for European and other exporters have gone forever. I suspect the wily Mr Putin will keep some tariffs and NTBs in place just in case.
    PS NTB = Non Trade Barrier. The stuff the Japs are very good at. Also used by V V Putin against Polish and Baltic poultry ( Poor hygiene standards etc )

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    • Replies: @Horzabky
    If the real objective of the sanctions was to do harm to the EU economies, they are a success.

    We Europeans lost billions, and most of the Russian market. Future natural gas deliveries are endangered because Russia will sell to China instead. Meanwhile, the sanctions made Russia able to feed her own population without having to import food, something which wouldn't have been possible without the sanctions and counter-sanctions. Russian Foreign Minister Lavrov stated that it was very important for Russia not to depend anymore for 30% of its food on foreign countries that view Russia as an enemy.

    One example. Before the sanctions took place, the pork sold in Moscow was usually French (and also German and Polish, IIRC). Good quality, industrial production of pigs, efficient meat conditioning, etc. The counter-sanctions obliged the Russians to produce their own pork. They couldn't have done so without the counter-sanctions, because you don't transform overnight archaic Soviet-style pig farms into modern, industrial pig farms. The counter-sanctions let Russian pork producers without rivals, and with the whole Russian market eagerly awaiting their products. Now, after more than two years of sanctions, that market is lost forever to EU producers.

    Natural gas is another example. NG is not like petroleum, which can be put in tankers and sent anywhere on earth. Petroleum is fungible, natural gas is not. NG goes through pipelines, which cost plenty. No pipeline, no gas. Liquefied gas can be put in tankers, but it is much more expensive than gas conveyed by pipelines. Russia made the effort to build pipelines to China and the rest of the Far East because she knows she can't rely on the EU market alone.

    But sure the EU can build pipelines to convey NG from the Middle East, as an alternative to Russian NG? Yes, but those pipelines would have to pass through Syria. With Assad in power, there's absolutely no chance it will happen. Especially since American and European efforts to topple Assad have rendered him totally dependent on Putin for his very life.

    Meanwhile, Russia will soon be able to choose whether it sells its NG to the EU or to China. Whoever will pay more, in the coming era of fossil fuel scarcity...

  7. @tom...
    Trump is beginning by setting most of the world on fucking fire and Roberts has his cultish idolatry set on Putin. Grotesque.

    Wow tom, your first ever post here at unz and it’s one I’m sure you’ll always be proud of. Congrats.

    Read More
  8. Price of oil goes up-Russian economy does well.

    Price of oil goes down-Russian economy does poorly.

    Same as it was when Putin took power.

    Right now price of oil is up and Putin is an economic genius.

    Now wait.

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    • Replies: @Mao Cheng Ji

    Right now price of oil is up and Putin is an economic genius.
     
    Well, if (for the sake of argument) what you say is true, that certainly makes him someone who prevents the oil revenues from being stolen and transferred to the west without having any positive effect on the Russian economy.

    Don't know if it's exactly 'genius', but - let's give credit where it's due - it certainly beats the alternative...
  9. @Verymuchalive
    Sanctions have failed. The usually reliable Anatoly Karlin wrote that the Russian Economy had grown by 1% last year and would grow much higher this year. Diversification and Import Substitution have quickly nullified the effects of sanctions. This wasn't meant to happen. The Russian Economy was meant to be so moribund that it would take decades to achieve this.
    Rather like the Russian Total Fertility Rate. In Europe, it's now second only to Iceland.
    Even if all barriers were removed, lots of markets for European and other exporters have gone forever. I suspect the wily Mr Putin will keep some tariffs and NTBs in place just in case.
    PS NTB = Non Trade Barrier. The stuff the Japs are very good at. Also used by V V Putin against Polish and Baltic poultry ( Poor hygiene standards etc )

    If the real objective of the sanctions was to do harm to the EU economies, they are a success.

    We Europeans lost billions, and most of the Russian market. Future natural gas deliveries are endangered because Russia will sell to China instead. Meanwhile, the sanctions made Russia able to feed her own population without having to import food, something which wouldn’t have been possible without the sanctions and counter-sanctions. Russian Foreign Minister Lavrov stated that it was very important for Russia not to depend anymore for 30% of its food on foreign countries that view Russia as an enemy.

    One example. Before the sanctions took place, the pork sold in Moscow was usually French (and also German and Polish, IIRC). Good quality, industrial production of pigs, efficient meat conditioning, etc. The counter-sanctions obliged the Russians to produce their own pork. They couldn’t have done so without the counter-sanctions, because you don’t transform overnight archaic Soviet-style pig farms into modern, industrial pig farms. The counter-sanctions let Russian pork producers without rivals, and with the whole Russian market eagerly awaiting their products. Now, after more than two years of sanctions, that market is lost forever to EU producers.

    Natural gas is another example. NG is not like petroleum, which can be put in tankers and sent anywhere on earth. Petroleum is fungible, natural gas is not. NG goes through pipelines, which cost plenty. No pipeline, no gas. Liquefied gas can be put in tankers, but it is much more expensive than gas conveyed by pipelines. Russia made the effort to build pipelines to China and the rest of the Far East because she knows she can’t rely on the EU market alone.

    But sure the EU can build pipelines to convey NG from the Middle East, as an alternative to Russian NG? Yes, but those pipelines would have to pass through Syria. With Assad in power, there’s absolutely no chance it will happen. Especially since American and European efforts to topple Assad have rendered him totally dependent on Putin for his very life.

    Meanwhile, Russia will soon be able to choose whether it sells its NG to the EU or to China. Whoever will pay more, in the coming era of fossil fuel scarcity…

    Read More
    • Replies: @Verymuchalive
    Excellent analysis, especially on the Petroleum/NG issue. " Fungible" had me searching for my dictionary. Mr Unz is right: you get a better class of commenter here.
    You are right about the EU sanctions policy: it has been a spectacular own goal. Very few leaders of EU states ( Orban is an exception ) have quibbled about enforcing it. Even those who have quibbled have enforced it anyway. Independent, rational thought is foreign to these people.
    Prediction: 10 years from now, European cities will be experiencing energy shortages as a consequence of this disastrous policy.
    , @Seamus Padraig
    Yup. Obama and Merkel screwed over the Euro-peons pretty good. You all will be paying for that Ukrainian debacle for some time to come.
  10. @anony-mouse
    Price of oil goes up-Russian economy does well.

    Price of oil goes down-Russian economy does poorly.

    Same as it was when Putin took power.

    Right now price of oil is up and Putin is an economic genius.

    Now wait.

    Right now price of oil is up and Putin is an economic genius.

    Well, if (for the sake of argument) what you say is true, that certainly makes him someone who prevents the oil revenues from being stolen and transferred to the west without having any positive effect on the Russian economy.

    Don’t know if it’s exactly ‘genius’, but – let’s give credit where it’s due – it certainly beats the alternative…

    Read More
  11. If the real objective of the sanctions was to do harm to the EU economies, they are a success.

    Well, maybe not so much to harm EU economies, but it could be argued that two major objectives of the US politics on the European continent in the last few years (demonization of Russia and the inflow of ME migrants in Germany) was to punish Germany and to create a rift between the EU and Russia.

    After all, the purpose of NATO was defined, by its very first Secretary General, as “to keep the Russians out, the Americans in, and the Germans down.” I guess the Germans were getting a bit too uppity, the Russians a bit too friendly, and the Americans a bit too distant…

    Read More
  12. @Horzabky
    If the real objective of the sanctions was to do harm to the EU economies, they are a success.

    We Europeans lost billions, and most of the Russian market. Future natural gas deliveries are endangered because Russia will sell to China instead. Meanwhile, the sanctions made Russia able to feed her own population without having to import food, something which wouldn't have been possible without the sanctions and counter-sanctions. Russian Foreign Minister Lavrov stated that it was very important for Russia not to depend anymore for 30% of its food on foreign countries that view Russia as an enemy.

    One example. Before the sanctions took place, the pork sold in Moscow was usually French (and also German and Polish, IIRC). Good quality, industrial production of pigs, efficient meat conditioning, etc. The counter-sanctions obliged the Russians to produce their own pork. They couldn't have done so without the counter-sanctions, because you don't transform overnight archaic Soviet-style pig farms into modern, industrial pig farms. The counter-sanctions let Russian pork producers without rivals, and with the whole Russian market eagerly awaiting their products. Now, after more than two years of sanctions, that market is lost forever to EU producers.

    Natural gas is another example. NG is not like petroleum, which can be put in tankers and sent anywhere on earth. Petroleum is fungible, natural gas is not. NG goes through pipelines, which cost plenty. No pipeline, no gas. Liquefied gas can be put in tankers, but it is much more expensive than gas conveyed by pipelines. Russia made the effort to build pipelines to China and the rest of the Far East because she knows she can't rely on the EU market alone.

    But sure the EU can build pipelines to convey NG from the Middle East, as an alternative to Russian NG? Yes, but those pipelines would have to pass through Syria. With Assad in power, there's absolutely no chance it will happen. Especially since American and European efforts to topple Assad have rendered him totally dependent on Putin for his very life.

    Meanwhile, Russia will soon be able to choose whether it sells its NG to the EU or to China. Whoever will pay more, in the coming era of fossil fuel scarcity...

    Excellent analysis, especially on the Petroleum/NG issue. ” Fungible” had me searching for my dictionary. Mr Unz is right: you get a better class of commenter here.
    You are right about the EU sanctions policy: it has been a spectacular own goal. Very few leaders of EU states ( Orban is an exception ) have quibbled about enforcing it. Even those who have quibbled have enforced it anyway. Independent, rational thought is foreign to these people.
    Prediction: 10 years from now, European cities will be experiencing energy shortages as a consequence of this disastrous policy.

    Read More
  13. @Horzabky
    If the real objective of the sanctions was to do harm to the EU economies, they are a success.

    We Europeans lost billions, and most of the Russian market. Future natural gas deliveries are endangered because Russia will sell to China instead. Meanwhile, the sanctions made Russia able to feed her own population without having to import food, something which wouldn't have been possible without the sanctions and counter-sanctions. Russian Foreign Minister Lavrov stated that it was very important for Russia not to depend anymore for 30% of its food on foreign countries that view Russia as an enemy.

    One example. Before the sanctions took place, the pork sold in Moscow was usually French (and also German and Polish, IIRC). Good quality, industrial production of pigs, efficient meat conditioning, etc. The counter-sanctions obliged the Russians to produce their own pork. They couldn't have done so without the counter-sanctions, because you don't transform overnight archaic Soviet-style pig farms into modern, industrial pig farms. The counter-sanctions let Russian pork producers without rivals, and with the whole Russian market eagerly awaiting their products. Now, after more than two years of sanctions, that market is lost forever to EU producers.

    Natural gas is another example. NG is not like petroleum, which can be put in tankers and sent anywhere on earth. Petroleum is fungible, natural gas is not. NG goes through pipelines, which cost plenty. No pipeline, no gas. Liquefied gas can be put in tankers, but it is much more expensive than gas conveyed by pipelines. Russia made the effort to build pipelines to China and the rest of the Far East because she knows she can't rely on the EU market alone.

    But sure the EU can build pipelines to convey NG from the Middle East, as an alternative to Russian NG? Yes, but those pipelines would have to pass through Syria. With Assad in power, there's absolutely no chance it will happen. Especially since American and European efforts to topple Assad have rendered him totally dependent on Putin for his very life.

    Meanwhile, Russia will soon be able to choose whether it sells its NG to the EU or to China. Whoever will pay more, in the coming era of fossil fuel scarcity...

    Yup. Obama and Merkel screwed over the Euro-peons pretty good. You all will be paying for that Ukrainian debacle for some time to come.

    Read More

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