For over a year, President Trump has been under investigation for possible collusion with Russia’s President Vladimir Putin. Supposedly, there was a quid pro quo — Putin would help Trump get elected and Trump would facilitate Putin’s global ambitions. While hundreds of investigators spending millions of dollars have examined possible Russian interference in the 2016 election, little attention has been paid to the other half of the supposed bargain.
In other words, has Trump helped Russia? The economic, political and diplomatic evidence supports a negative view — Trump’s actions have severely damaged Putin’s Russia.
{mosads}The collapse of energy prices since 2014 devastated the Russian economy. It is generous to call Russia an industrial state. It is more like a developing country in that its exports are dominated by raw materials such as energy, metals and wood products. Until recently, Russia was the world’s second largest oil exporter — after Saudi Arabia — and the world’s largest natural gas exporter. These energy exports, primarily to Europe, provide not only a substantial portion of the Russian government’s revenues but also leverage for pressuring foreign governments. As Poland, Slovakia and the Ukraine have discovered during the last half decade, defy Russia and expect a cold dark winter when Russia cuts your energy supply.
It is ironic that the fracking revolution that greatly contributed to the collapse of world energy prices began during President Obama’s administration. Obama had adopted multiple policies to wean the United States from dependence on fossil fuels by blocking oil drilling on public lands, opposing construction of pipelines, financing multiple clean-energy initiatives, and imposing severe restrictions on coal. However, the private sector’s fracking revolution led to a 40 percent increase in U.S. oil production and the collapse of world energy prices.
It was expected that if Hillary Clinton had become president, she would have continued Obama’s anti-fossil fuel policies and, despite fracking, eventually the world would have experienced a return to $100-a-barrel oil. However, Trump has successfully reversed many of Obama’s energy policies, which is expected to result in a decade or more of low prices for oil, natural gas and coal. The adverse economic impacts on Russia are severe: lower exports, reduced government revenues, slower economic growth and higher unemployment. Low energy prices also weaken Russian attempts to threaten its neighbors with energy embargos. In addition, reduced government revenues will make it more difficult to finance Putin’s foreign aid and defense programs.
Further weakening Russia’s influence in Europe and the Middle East are the Trump decisions to provide military aid to the Ukraine and Baltic states, as well as to pressure other NATO members to increase defense expenditures. Meeting these challenges will require money that Russia will find it difficult to raise. After all, the Russian economy is one-fifth the size of that of the United States and, in fact, is smaller than that of Germany. The combination of lower revenues as a result of lower energy prices and increased fiscal expenditures to meet U.S. and NATO challenges has put Putin’s Russia in a difficult situation.
Where does this leave the accusations of Trump-Putin collusion? One explanation is that Trump broke the supposed agreement after he was elected, which means that the strongman of Russia was outwitted by a former reality TV star. In this case, one would expect an angry Putin to get revenge by revealing the supposed agreement in order to ruin Trump. But such a reveal has not occurred. Maybe the other alternative is more plausible. There was no collusion, no agreement between Trump and Putin. President Trump is just doing two things that Republican presidents usually do — support the energy industry and oppose Russia.
Frank R. Gunter is a professor of economics at Lehigh University and a senior fellow at the Foreign Policy Research Institute.