A transatlantic flight can be a long time in international politics, something Ukrainian president Zelensky found out this week, as Donald Trump had a 2h phone call with Vladimir Putin while Zelensky was airborne enroute to Washington D.C. As he exited his plane, it quickly became clear that he would not be able to secure any materially improved support from the United States in the war against Russia and that his trip to Washington would hence be a disappointment.
Rather than potentially signing new military support deals with U.S. producers (paid for indirectly by the EU), moving U.S. sanctions on Russia forward, and even perhaps starting a process of receiving U.S. Tomahawk missiles, the Ukrainian delegation was told off with yet another demand from Trump so simply “stop where they are now, make DEAL!, and all go home“. This will have been a major disappointment for Kyiv, and as noted in my last note represents a major diplomatic success for Russia, which once again managed to avoid the U.S. government taking any direct actions against it.
The next possible steps now include a possible Trump – Putin meeting in Budapest – according to Trump – in (as usual) about two weeks’ time. Such a bilateral summit would represent another gain for Vladimir Putin, as he would once again meet on equal terms with a U.S. president in a setting without any prospects for actually affecting the war situation, as the summit would not yield increased pressure on Putin to alter his maximalist war aims.
That the meeting might take place in Budapest will quite naturally also represent a major political coup for Hungarian prime minister Orban, who is far behind in opinion polls for the next Hungarian election due in April 2026. The presence of Vladimir Putin inside the EU would serve as an acute embarrassment to all other European countries and could boost Orban’s domestic electoral message of “standing for peace” with parts of the Hungarian electorate. Consequently, the choice of Budapest as a possible location for a Trump – Putin summit must be seen as a potential deliberate act of “political sabotage/support for a mutual ally in Orban” by Russia and the Trump Administration. It cannot however be assumed that this summit will in the end take place, so caution is warranted.
The renewed unwillingness of Donald Trump to take active measures against Russia naturally leaves Ukraine in a weaker place than otherwise would have been the case, and still wholly dependent on EU and rest of G7 support. Consequently, it must now be assumed that EU leaders will at their upcoming EU Council meeting next week take the political decision to go ahead with the up to €140bn Reparations Loan to Ukraine, which will then be legally finalized by the end of the year. It has become a politically necessary show of concrete support right now for Ukraine’s ongoing war effort. Parts of this funding will likely also be used by Ukraine to purchase U.S. weaponry in the coming years, and certainly make sure that Ukraine’s domestic military industrial capacity is fully utilized.
That it has again been revealed that Donald Trump is unwilling to expend U.S. financial, military or political resources on actively weakening Russia does not, however, mean that his administration does not – when it suits it – take other actions that directly and indirectly affect Russia and/or the war situation. Such measures include ongoing U.S. weapons sales to NATO/Ukraine, and political pressure on select buyers of Russian fossil fuels, when it fits the broader trade policy goals of the Trump Administration and might help in securing “America a better trade deal”. This is particularly relevant with regards to India, likely soon also Japan, and obviously also China.
Lastly, as pointed out by Colin Fenton in his note yesterday (Saudis Push Oil Toward Trump’s $50 Target Ahead of MBS’ White House Visit), Donald Trump is actively pursuing a global oil price reduction to $50/barrel. If such a price level was delivered by for instance increased Saudi supply to generate political goodwill in the White House (and possible US-Saudi Security Pact), it would represent a dramatic “de facto economic sanction” on Russia (which sells oil with a significant Urals discount to the global price) and represent a very significant economic act to limit Russia’s ability to finance its war.
If one sensibly assumes that the inflationary impact of Trump’s tariffs from delayed passthrough to consumers and even the immigration crackdown is yet to be fully felt by U.S. consumers/voters and businesses, it must also be assumed that Trump’s political incentive to drive down global oil prices in an upcoming U.S. election year will increase. This is not likely to be good news for the Russian government’s financial situation.
All told, this week’s diplomacy has been a major disappointment for Ukraine, and instead of increased economic and military pressure on Russia, the situation essentially remains unchanged. Ukraine remains economically wholly dependent on EU/non-US G7 support, while Trump’s “America First Foreign Policy” seems likely to inflict significant but only long-term economic damage on the Russian economy. Consequently, the outlook for the war remains unchanged, too. Fighting on the front will remain intense, but likely not result in material territorial control shifts, while strategic bombing campaigns will intensify from both sides. No diplomatic efforts are likely to succeed in the near-term, and fighting looks likely to continue into 2027.
Jacob
