Russia’s plan to sabotage the U.S. energy industry

Discussion in 'Politics' started by JohnHamilton, Mar 11, 2020.

  1. JohnHamilton

    JohnHamilton Well-Known Member

    Although the Corona Virus flue crisis as dominated the news and helped to melt down the stock markets, another story has also contributed to the financial woes. Analysts credited much of the Dow Jones 2,000 point melt down a couple of days ago to the oil price situation. The disagreement between Russia and Saudi Arabia over oil production comes down to supply and prices.

    The Russians want to flood the oil market for the time being which would put the bite on U.S. oil shale producers. The U.S. producers are dependent upon at least a $50 to $55 per barrel price to remain profitable. Numbers below that result in losses which will make it harder for U.S. producers to maintain their debt structure. A massive financial failure in the U.S. petroleum industry would jeopardize our energy independence. It could also send shock waves through the U.S. banking and financial systems.

    Once more “Mother Russia” is out to get us. Now that Putin has been declared the ruler of Russia, virtually for life, it seems that he is feeling his oats with his feeble economy that is smaller than the size of Italy.

    It is interesting to note the timing of this. If Trump really is “Putin’s man,” why would he want to start an economic disruption in the United States during an election year? If Putin has so much invested in Trump, why his doing this?

    The answer is there was, nor as there any Russian collusion that is credible. Who knows who Putin wanted to be the president of The United States? If I were he, I would have preferred Hillary because she is both corrupt and incompetent. Nevertheless, Russia’s current policies don’t look to be tilted toward the Trump administration. In fact, it is quite the opposite.
  2. CoinBlazer

    CoinBlazer de omnibus dubitandum

    Could this be related to Russians plane that was intercepted near Alaska, Putin trying to get a peek at Alaska and what oil production is there?
    JohnHamilton likes this.
  3. JohnHamilton

    JohnHamilton Well-Known Member

    It's possible, but I have not heard about any links between the events. I think that the Russians are spying on us as a matter of policy.
  4. Mopar Dude

    Mopar Dude Well-Known Member

    The chess match that has played out between Russia and the US has been many decades in the making. We defeated them in the cold war without firing a shot and that has not been very palatable to the arrogance that defines their national politics. America has made itself vulnerable by running all of our institutions via the web and allowing our economic condition, while recently healthy is truly somewhat fragile. This gamesmanship by the Russians is all intended to create chaos in our nation. They could not beat us externally but have figured out how to hurt us internally. Forget collusion. That's all partisan pipe dream horse manure. Chaos is the friend of our enemy and Russia is our enemy. And we have swallowed the hook.
  5. JoeNation

    JoeNation Patron Saint of Idiots

    Feb. 6, 2017
    Trump says he respects Putin during a Super Bowl interview with Bill O’Reilly. Trump defends Putin when O’Reilly calls him a killer.

    “There are a lot of killers,” Trump says. “Do you think our country is so innocent? Do you think our country is so innocent?

    Oct. 27, 2016
    Trump says at a rally in Ohio that it was not smart of Clinton to speak “very badly of Putin.”

    Oct. 19, 2016
    At the third presidential debate, Trump denied Clinton’s charge he was Putin’s “puppet”, saying “No puppet. You’re the puppet.”

    He further denied having met Putin and said that Putin had “outsmarted” Clinton and Obama.

    Sept. 7, 2016
    Trump says in a town hall with NBC’s Matt Lauer that he considers Putin a stronger leader than Barack Obama.

    “If he says great things about me, I'm going to say great things about him. I've already said, he is really very much of a leader. I mean, you can say, 'Oh, isn't that a terrible thing' -- the man has very strong control over a country,” Trump said. “Now, it's a very different system, and I don't happen to like the system. But certainly, in that system, he's been a leader, far more than our president has been a leader.”

    Aug. 5, 2016
    Trump again says at a campaign rally in Green Bay that he doesn’t know Putin and attacks Hillary Clinton for saying he wants to befriend him:

    “And I'm saying to myself what's wrong with that? That's good,” Trump said.

    July 25, 2016
    Trump tweets:

    Donald J. Trump


    The new joke in town is that Russia leaked the disastrous DNC e-mails, which should never have been written (stupid), because Putin likes me

    April 26, 2016
    Trump says during a victory speech “We're going to have a great relationship with Putin and Russia.”

    And my favorite...

    June 18, 2013
    Trump tweets:

    Donald J. Trump

    Do you think Putin will be going to The Miss Universe Pageant in November in Moscow - if so, will he become my new best friend?

  6. CoinBlazer

    CoinBlazer de omnibus dubitandum

    Thank you for the lovely reminder :)
  7. JoeNation

    JoeNation Patron Saint of Idiots

    LOL!!! :D
  8. JohnHamilton

    JohnHamilton Well-Known Member

    Joe, since you are socialist, who knows nothing about how business people operate, you can't be expected to understand how many successful business people treat their clients and competitors. It's called "stroking the client." You complement them and tell them what they want to hear in public and in private to get them to co-operate, or if they are less than astute, loll them into complacency. If you are the object of this, you take it in stride for what it is.

    Trump did much the same thing with Kim Jong-un. He called him "a great leader" and praised him in public when he was looking to make a deal. He also called him "little rocket man" when he was trying to get him the table. It's the carrot and the stick. When the deal fell through in Vietnam, Trump walked. That's what you do when you reach an impasse.

    What would you have him do with Putin? He could call him an A-hole all the time, but that would not get us anywhere. You do that when you are in a shooting war with another contry.

    Admittedly Trump can be too sharp in his language at times and too effusive at others. It’s his style, and sometimes it certainly seems to be impropriate, especially in the context of normal diplomatic protocol. On the other hand, he has gotten some trade deals fixed which were not good for the American worker. He’s also pushed the European countries to kick in more for their national defense instead of taking us for a free ride.
  9. JoeNation

    JoeNation Patron Saint of Idiots

    Well, that is a reasonable belief but the devil is in the details. Lets look at what the result of the China/US agreement was. And please, don't call it a trade deal. These are the actual terms.

    The much-touted “phase one” trade agreement between the United States and China was finally unveiled Wednesday and, contrary to U.S. President Donald Trump’s claims that it is “[o]ne of the greatest trade deals ever made,” remains as underwhelming as when the outline was made public last month.

    Essentially a cease-fire agreement in what had threatened to escalate into an all-out trade war between the world’s two biggest economies, the new agreement is a big purchase order for U.S. goods, topped with plenty of rehashed Chinese promises of reforms in areas like intellectual property protection, and leavened with a novel enforcement mechanism that has never been tried before in a trade deal. With U.S. farmers hurting badly from the trade war in an election year, the deal promising tens of billions of dollars more in purchases of soybeans and other agricultural products appears at least partly designed to boost Trump at the polls in November.

    Here are five takeaways from the just released text of the new U.S.-China agreement.

    1. It’s a truce, not a free trade deal.
    While markets were happy that the deal foreclosed an even bigger escalation of trade tensions in December, including another tranche of U.S. tariffs, the bulk of U.S. duties on Chinese exports to the United States will remain even after the signing of the deal. About two-thirds of Chinese goods will still face import taxes that are six times higher than when Trump took office—and most of those are the kinds of intermediate goods that U.S. manufacturers use to make their own products. U.S. businesses and consumers have already forked over more than $40 billion to pay for Trump’s import taxes.

    China, too, will apparently keep its own tariffs on U.S. exports, including on energy products like natural gas and crude oil. So the deal, whatever it does, doesn’t move the United States much further away from the protectionism it has embraced since Trump took office.

    While the Trump administration talks about an eventual “phase two” deal with China that could actually tackle structural issues that bedevil the two economies, few trade experts expect much progress, if any, on such an agreement—especially during an election year. And politics could themselves make the new agreement more fragile than it seems: With Trump’s hawkish stance on China a popular one, he may be under pressure this year to go back to his preferred path of confrontation and tariffs to score political, rather than economic, points.

    2. It doesn’t address the core issues that started the trade war.
    The United States began its tariff fight with China on the grounds of a so-called Section 301 investigation, which highlighted Beijing’s abuse of its state-led economic model, including via state-owned companies, industrial subsidies, and state-directed cyber-espionage. Other than some fresh Chinese promises to crack down on intellectual property theft (more below), the deal just signed doesn’t address any of those core concerns that supposedly motivated the Trump administration in the first place.

    “This does not in any sense address the big, systemic issues that China and the United States have with one another on trade,” said Chad Bown of the Peterson Institute for International Economics.

    That’s particularly true when it comes to China’s alleged currency manipulation for competitive advantage, for years a bogeyman of Trump and his officials, even when China was doing the exact opposite. In the new agreement, China reaffirmed commitments it had already made, such as in various G-20 meetings, to avoid manipulating the renminbi for competitive advantage and signed up for the bare minimum in foreign reserve disclosures. (On Monday, just two days before the signing ceremony, the U.S. Treasury Department abruptly removed China from the list of currency manipulators, just months after adding China to the list during the darkest days of the trade spat.)

    “The foreign exchange provisions were the most disappointing” aspect of the deal, said Brad Setser of the Council on Foreign Relations. “Of all the various things expected in the deal, they were really underwhelming. The absence of any genuine, new commitments on the part of China, simply repackaging existing commitments—that was undoubtedly disappointing.”

    When the trade fight began, the Trump administration set out to make China a more market-friendly economy. Instead, the United States has embraced state-managed trade, where Beijing commits to using state-owned firms to purchase guaranteed amounts of U.S. farm goods, oil, gas, and manufactured products.

    “Given that attempts to create new opportunities for U.S. exporters by changing rules and policies haven’t been overwhelmingly successful in recent years, I can see why the administration might feel that setting out targets and asking a state-dominated economy to meet those targets is a way to do it,” Setser said.

  10. JoeNation

    JoeNation Patron Saint of Idiots

    3. It’s all about shrinking the U.S. trade deficit.

    That kind of managed trade is the centerpiece of the new agreement: a Chinese commitment to purchase, over a two-year period, $200 billion worth of U.S. goods above and beyond what it bought in 2017, before the trade war began in earnest. Big purchases like that have been the focus of the Trump administration’s approach since the beginning, because, while the trade professionals launched a formal investigation into China’s abusive macroeconomic practices, Trump cares mainly about the U.S. trade deficit with China, which totaled $379 billion in goods and services in 2018.

    The new agreement calls for China to buy an additional $33 billion in manufacturing goods this year and $45 billion next year; an additional $12.5 billion in farm products this year and $19.5 billion next year; $18.5 billion more in natural gas and crude oil this year and $34 billion more next year; and finally, $13 billion more in services this year and $25 billion next year.

    If all those planned purchases materialize—and there are considerable doubts they will—it could represent a boon for U.S. farmers and manufacturers (assuming they don’t just suck away exports from other markets). But there are a few problems. First, China still has most of its tariffs on U.S. exports, including on many of the goods on that list; since China insists that it wants commercial considerations to determine its purchases, that could be a problem for U.S. exporters.

    Second, those numbers are hugely ambitious. The biggest-ever year for agricultural sales to China came in at $29 billion, for instance; the new agreement would require China to buy $40 billion or more worth of farm goods in 2021, roughly double what it bought in 2017. Similar stretches would be required to meet the export goals in energy and manufacturing—and if the Trump administration believes China isn’t meeting its commitments, it can blow up the deal.

    Third, such managed trade might be illegal under World Trade Organization (WTO) rules, which prohibit discrimination. Other suppliers of agricultural goods to China, such as Brazil and Argentina (which have taken advantage of the last two years of turmoil to flood the Chinese market), are unlikely to stand idly by if China’s new purchases simply come out of their pocket. If their own exports suffer, they could bring a complaint against China at the WTO for discriminatory practices.

    Of course, since the Trump administration single-handedly dismantled the WTO’s dispute settlement system last month, such complaints may amount to pounding sand—countries around the world now have no way to ultimately adjudicate their trade disputes thanks to the administration’s disdain for multilateralism.

    4. The agreement’s enforcement mechanism is untried—and risky.
    For the Trump administration, it’s just as well that the WTO is moribund, because the enforcement provisions in the new agreement are entirely bilateral. Any disputes over compliance with the terms of the agreement will be dealt with in bilateral consultations at a staff level by trade experts. If they can’t resolve it, it can get kicked up to the level of the U.S. trade representative and China’s vice premier. If they still can’t solve it, the aggrieved party can retaliate as it sees fit—and the other side can’t do anything about it. If the other side doesn’t like the retaliation, they have one option, according to the deal’s text: “[T]he remedy is to withdraw from this Agreement.”

    “The way it seems enforcement will work is very different than in any other trade agreement ever,” Bown said. “There are a lot of open questions on how this is going to work in practice.”

    5. There are some small victories tucked into the agreement.
    While the “phase one” deal is hardly the game-changer that Trump or administration officials tout, there are some positives tucked into the 96 pages. For instance, China reiterated promises it has made in the past to take a tougher line on protecting intellectual property rights. And China, which denies ever having forced foreign companies to hand over their technology as the price of doing business there, agreed not to do what it says it didn’t do anyway. (At least the central government did—but since a lot of U.S. complaints focus on what local and regional officials and firms do, it’s not clear the agreement will entirely solve that problem, either.)

    The United States and China seem to have torn down a number of non-tariff barriers to U.S. agricultural trade, such as limits on U.S. poultry or beef exports. Those Chinese commitments to open up greater access for certain farm and fish products, coupled with pledges to buy more agricultural goods overall, could over time start to undo some of the damage wrought by the trade war over the last two years.

    And the United States did claw greater access for financial services in the huge Chinese market, opening the door for U.S. banks, insurance companies, rating agencies, and electronic payment systems like Visa and Mastercard to fully enter a market that has long been denied them.

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