Since his return to power on January 20, President Trump has been making waves, particularly with his recent phone call to President Putin of Russia on Wednesday, which has sent shockwaves through European political circles.
“President Putin agreed to end the war,” Mr Trump announced in an upbeat tone, following a 90-minute conversation with his Russian counterpart. This statement set off a flurry of diplomatic activity, much to the chagrin of European leaders and Ukrainian President Zelensky, who was notably left out of the loop.
The most significant impact for Mr Zelensky was the U.S. decision to block Ukraine's NATO membership aspirations. "We don’t want a NATO member next to Russia," Mr Trump declared while adding insult to injury, effectively undermining not only Mr Zelensky but also the advocates of Ukraine's NATO integration.
“I invited President Putin to America, and he invited me to Russia,” Mr Trump added, signaling that the rapport between these two world leaders remains strong; there was a palpable disbelief looming over the corridors of power in Europe, because the countries in question were planning to take on Russia militarily in the worst case scenario in order to free Ukraine from the Russian military grip.
The next day, Mr Trump further stirred the pot by suggesting, "Russia should rejoin the G-8," a move he knows could bypass opposition, highlighting his unilateral approach to international relations.
European politicians are now grappling with this sudden policy shift. Previously, under the Biden administration, Europe had been actively supporting Ukraine militarily to counter what they described as Mr Putin's "misadventures." Now, they face a complete U-turn from the Trump administration, rendering their strategic plans obsolete and complicating their relationship with Mr Putin.
Adding to the tension, U.S. Defense Secretary Pete Hegseth made a pointed remark in Germany, where he met with American troops. "Uncle Sam is not going to be Uncle Sucker," Mr Hegseth declared, warning that NATO allies not meeting the 2% GDP defense spending commitment could expect no protection from the U.S. in case of an attack, implicitly referring to threats from Russia.
Trump's administration now pushes for an increase to 5% of GDP for NATO contributions, a significant jump from the current standard.
These developments indicate a growing rift between the U.S. and Europe, traditionally bound by a strong alliance since World War II. With the added threat of reciprocal tariffs, the future of transatlantic relations looks increasingly uncertain and fraught with challenges.
If the warming relations between Russia and the US continue unabated, the impact will extend beyond politics into the economic sphere. This could allow Russia to increase its exports of precious commodities as constraints are lifted, potentially strengthening its position within OPEC+. Saudi Arabia's decision to host the warring parties underscores their keen interest in facilitating a lasting peace deal.Despite President Trump's campaign promise to decisively reduce inflation, this has not yet been achieved, largely due to persistently high energy prices. Trump understands that the market requires more supply, and in the short term, OPEC+ is the main entity capable of delivering this. Shortly after his inauguration, he urged OPEC+ to ramp up production.
Meanwhile, oil prices have been hovering just above the psychologically significant $70 per barrel threshold. With potential peace talks between Russia and Ukraine on the horizon, concerns about supply disruptions are diminishing, even as sanctions on Iran remain tight. Under these circumstances, it seems unlikely that oil prices will breach the $80 per barrel ceiling.
