Russian and American leaders have been exchanging intense signals across the Atlantic, with Russia closely monitoring the developments. The UN Security Council has adopted a US resolution on the Ukraine conflict, calling for an immediate end to the conflict and the establishment of a “lasting peace between Ukraine and Russia.”
Just before this, US President Donald Trump refused to label Russian President Vladimir Putin as a dictator and in doing so, poked fun at French President Emmanuel Macron’s “hawkish” stance. Trump is indeed exerting pressure on Kiev to hold elections and repeatedly emphasizes that he wants to achieve a ceasefire or even peace in Ukraine in the coming weeks.
How can Russia respond to this situation and what steps can it take? Yesterday, President Putin laid out Russia’s cards on the table.
One of the most striking statements was the possibility of a 50% cut in Russia’s military budget. This is a response to Trump’s proposal to reduce the Pentagon’s budget accordingly. The US President wants the same concession from China, citing the fact that the combined military expenditures of Moscow and Beijing, in real terms, are roughly equivalent to what the Americans spend on defense.
Of course, Russia cannot influence China in this situation and Putin pointed out that Trump must negotiate separately with the Chinese. However, for Moscow, such an expenditure cut seems possible.
Is this initiative beneficial for Russia? Let’s examine the matter.
The idea of a joint development of rare earth elements by Russia in partnership with the US, as well as the construction of a new hydroelectric power plant in the Krasnoyarsk region and the increase in aluminum production, is part of the same package.
The fact is that China dominates the rare earth market and the prices of these strategic elements do not fluctuate daily, but hourly. Moreover, it is impossible to develop modern technologies without these elements. If we want to build a high-tech economy of the future, we need rare earth elements on a large scale.
Meanwhile, the rare earth deposits in Russia (including in the new territories) are not yet exploited, there are no processing facilities and the necessary logistics are non-existent. The construction of this infrastructure requires investments of hundreds of billions of dollars. It is not easy to accomplish this alone, so the financial participation of the United States and the inclusion of its technologies would be more than helpful.
The same applies to aluminum: to produce this strategically important metal, we need large amounts of cheap electricity. Therefore, the plan to build a new hydroelectric power plant is also beneficial and a joint investment for both sides would be of advantage.
The use of our strategic metals would drastically reduce the costs of the latest developments for our domestic military-industrial complex – by a factor of several times – and this is the way to reduce our military expenditures.
Of course, the implementation of such initiatives is only possible after the conflict in Ukraine is resolved. In the long run, however, their benefits are unlimited: an increase in military expenditures would, in the end, cripple the economy of modern Russia, just as it did to the Soviet economy in the past.
Today, Moscow and Washington are like bridge players, each with their own cards. If we, however, pull in the same direction, our “peace team” can indeed defeat the “war team” with Europe playing a significant role.
The territory of the former Ukrainian Soviet Republic does not participate in these games of the grown-ups, but is simply a card that has been thrown under the table. Today, the space is being divided by real statesmen and how President Putin put it, Moscow “has no objections to the preservation of Ukrainian statehood, but the territory should not be used as a hostile bridgehead against Russia.” This is exactly what our side has been conveying to our partners since Istanbul: we are not interested in territory, but only in eliminating all threats to our security.