U.S. Scuttling Traditional Trade Relations

"The United States will help restore Russia’s access to the world market for agricultural and fertilizer exports, lower maritime insurance costs, and enhance access to ports and payment systems for such transactions."

"[The statement included ensuring safe navigation in the Black Se, a ban on strikes against energy infrastructure in Russia and Ukraine, and President Donald Trump’s imperative that] the killing on both sides of the Russia-Ukraine conflict must stop."

White House statement

 

WHAT DOES RUSSIA SAY IT WILL GET?

* The lifting of restrictions on state agricultural bank Rosselkhozbank "and other financial organizations involved in ensuring international trade in food (including fish products) and fertilisers, their connection to SWIFT, and the opening of necessary correspondent accounts".

* The removal of curbs on trade finance operations.

* The removal of sanctions and restrictions on companies producing and exporting food (including fish products) and fertilisers.

* The removal of sanctions and restrictions on insurance companies dealing cargoes of food (including fish products) and fertilisers. Russian Foreign Minister Sergei Lavrov specifically mentioned the Lloyd’s of London insurance market.

Reuters

 

"This is the most disturbing action that I think we've seen from [U.S. President Donald Trump] since his election."

"In essence, what he is doing is funding [Russian President] Vladimir Putin's regime ... and funding the death of Ukrainians."

"We do need to become less dependent, unfortunately, on the United States of America."

"It's a sad thing for us to say."

"[Saskatchewan may change how it responds to Trump's threats]."

Saskatchewan Premier Scott Moe

Cargo ships are seen from a patrol boat of Ukraine’s coast guard as they sail in the Black Sea, amid Russia’s attack on Ukraine, February 7, 2024. REUTERS/Thomas Peter/

 A plan by the United States to restore the Russian agricultural sector's position is, according to Saskatchewan Premier Scott Moe, a backchannel funding Ukrainian death and suffering. The White House statement carrying news of the United States plan to help Russia expand its markets following talks between American and Russian officials in Saudi Arabia is disturbing in its ramifications. The intention is to also lower maritime insurance costs and according to the Trump administration, enhance Russian access to shipping ports.

 

"This latest announcement from Donald Trump isn't just a betrayal of Ukraine, where people will continue to be killed and occupied under Putin's illegal invasion", added the province's NDP leader Carla Beck, responding to President Trump's threats as they apply to onerous tariffs to be imposed on Canada and Mexico for a full range of products entering the United States, along with extended similar threats to Europe, Japan and South Korea, even as the Trump administration is open to trade dialogue with Russian President Vladimir Putin, a stunning reversal of traditional U.S. trade policy and politics.

 

Saskatchewan, the world's largest producer of potash, a mineral in use as a crop-growing fertilizer, foresees consequences with Russian potash -- sanctioned since the 2022 invasion by Russia of Ukraine -- anticipating a scenario where Russian fertilizer will flood the market once sanction measure are lifted. This is all part and parcel of a coming global trade war inspired by the Trump administration where 25 per cent tariffs have been imposed on Canadian steel and aluminum, along with a 10 per cent levy on potash if it doesn't comply with the United States-Mexico-Canada Agreement.

The traditional trading partners of the United States are reeling in shock at the warnings and threats emanating from the White House. U.S. allies suddenly find themselves estranged and confused in their relations with the new administration whose pronouncements on stiff tariffs -- while warning of  consequences with retaliatory measures their once-trusting trading partners ruminate on imposing and then reconsidering when the U.S. -- warns further that retaliatory measures will only incur the wrath of the U.S. which will then impose even higher tariffs, upending global integrated trading patterns.

International experts on trade negotiations and investments are attempting to make sense of a sudden turn-about in international relations. What they are all certain of, is the conclusion that in alienating traditional trading partners with explosive accusations and punishing tariffs, the United States and American consumers in general will not come away unscathed. The unsettled situation will penalize the U.S. too, albeit not as stringently as its hapless trading partners. As well, a global recession appears to be waiting in the wings. 

A worker at the Mosaic potash mine near Belle Plaine, Sask., holds a few examples of the white, crystalline substance during a tour on April 26, 2024. (Alexander Quon/CBC)