When you say it's gradually beginning to bite now, in what kind of ways are the sanctions now hindering

Russia? Well, you know, the sanctions on Russia make everything more expensive for the country and makes everything slower. Although there's an argument to be made, Andrew, that the real blow on Russia's economy is really domestically and internally. And that is the amount of state spending on funding the military that is driving inflation, the labor shortage that is driving wage growth, another driver of inflation, and the sort of shortage economy that is emerging in Russia that is its own sort of worst enemy, if you might say.

So if President Trump does sense that there is an economic vulnerability here, is he necessarily wrong?

He's not wrong. He's sort of almost right. I mean, tariffs on Russia are not going to do anything. I mean, trade between the United States and Russia is down by 90 percent since the start of the war on Ukraine, since the full-scale invasion. So there really is nothing to put a tariff on, and there's very little to tax. The economy would be most vulnerable if President Trump were to consider secondary sanctions, and that means sanctioning other countries that are doing business with Russia. And, you know, the primary targets there would be India and China because they are Russia's largest customers of oil. But, you know, sanctioning India and sanctioning China are steps that are probably too far to make for Trump right now. I

mean, it would be an extremely cynical, well, nigh heartless decision because it would necessitate the expenditure of many more Ukrainian and Russian lives. But if the sanctions are starting to bite, if you're not too worried about battlefield casualties, doesn't it make more sense to let Russia twist? Well, Russia cannot wage war on

Ukraine indefinitely. I mean, the pressure domestically on Putin to do something about the economy is coming from several sources. You know, the Russian business elite right now would like to see an end to the war tomorrow because they are suffering under 21 percent interest rates from the Russian central bank. It is impossible for Russian companies to borrow money to grow. And they also want to resume their business activities with the rest of the world, and particularly with Europe, which they can't do now as a result of sanctions. Trump can let the Russian economy twist for a while. The one thing we don't want to see is a complete economic collapse in Russia and the political chaos that might, and I say might, ensue from that. Well,

that brings us to the person who is the key decision maker here and has been all along, which is President Vladimir Putin of Russia. Do we imagine that these vague so far threats from Trump are going to perturb him in the slightest? No. In fact, the reaction from Dmitry Peskov, Putin's primary spokesman,

in response to these new threats of taxes, tariffs and sanctions was it was a great big snore. And, you know, they they said that there is absolutely nothing new in what they're hearing coming out of Washington. They said they're waiting for more concrete proposals towards peace negotiations. And, you know, sort of saying, you know, where's the beef in all of this fits in very squarely with Russia's strategy to delay any sort of peace negotiations so that they can continue to wage the ground war against Ukraine. You

said earlier that Russia can't do this forever, but do we get any sense at all that there is any appetite on Russia's part for coming to terms? Wouldn't Vladimir Putin be able to call what he has a victory? Well,

yes. I mean, I think that Russia has achieved a certain level of its military goals in Ukraine. I mean, Russia is certainly not going to drive on Kiev. That's what was supposed to happen at the very beginning of the war in a space of just a few weeks. And that hasn't happened now as we approach the third anniversary of the war. But Russia is doing better on the ground, if you want to sort of better in inverted commas, than it has been recently. It's seeing greater territorial gains on the ground in Ukraine. And so for the time being, there's very little incentive for them to stop and to negotiate. And frankly, at the end of the day, Putin's military goals to him are much more important than his domestic economic goals. And

just finally, Charles, because it is a related subplot, the world, certainly at least the Western democratic NATO allied world remains on tenterhooks attempting to figure out what Donald Trump's attitude to NATO is actually going to be. Since he was sworn back in on Monday, are we any the wiser about that? Yeah, this is really interesting because particularly in the case with Ukraine,

Trump has made a couple of unusual noises when it comes to security guarantees. And Trump has said that he was willing to give Ukraine whatever it needs to fight back against Russia if Russia doesn't respond to the threatened tariffs, taxes and sanctions. And that was unusual. I think it's still a line that Trump has yet to cross on saying that NATO would become more involved in defending Ukraine. He hasn't specifically made any comments on that, although some of his envoys have had a go at NATO and a go at NATO director Mark Rutte over the past couple of days. So no concrete signs from the White House. But the mood music is still sort of quite negative as far as NATO is concerned, coming out of Washington more broadly.

Charles Hecker, Russia analyst and author of Zero Sum, the arc of international business in Russia. Thanks, as always, for joining us. You're listening to The Globalist on Monocle Radio. This is The Globalist on Monocle Radio with me, Andrew Muller. It's 8.09 here in Zurich, 7.09 back in London. Now, US President Donald Trump did not attend the World Economic Forum in Davos, but he did address it remotely, his first major speech to his fellow global leaders since being sworn back in on Monday. To the audible bemusement of attendees, he repeated his threat to annex Canada, promised to somehow reduce the price of oil, threaten tariffs against countries and companies he dislikes, and promised tax breaks to those of which he approves. Unsurprisingly, given his general proclivities, he had little to say on the subject of green policies, but other attendees at Davos did. Well, I'm joined with more by Florian Egley, senior associate of the Swiss foreign policy think tank for us. Florian, did Donald Trump say anything that has surprised us where sustainability is concerned? He has a few times this week reiterated his extreme vexation about wind farms. Yeah,

good morning, Andrew. Yeah, perhaps that's a bit of a surprise that he has made such strong claims for singular technology. So he's, you know, totally banned wind farms first day in office. He said nothing whatsoever, at least nothing that I'm aware of on solar. and forth and at least for the next two years when President Trump can really decide we're going to see you know the you know green or whatever you want to call it energy transition you know going forward particularly worldwide I don't I don't think that's gonna there's gonna be a massive damp but we're gonna see some technologies kind of cut out from this and wind is really gonna struggle. But is Donald Trump not potentially

placing the United States at something of a competitive disadvantage here? Because if the US absence itself from the next four years, at least, of that transition you're talking about, it's going to get left behind, isn't it? Because nobody thinks fossil fuels are the future. No,

they're not. And they're just economically not. So I think the biggest trade off for this administration is going to be that, as you say, as they're pulling out of, you know, supporting green technologies, which the Biden administration has done very strongly, they're going to face backlash domestically because a lot of a lot of companies have done very big investments in the past few years, billions of investments. and they rely on these schemes going forward so that these investments pay off. So they're going to face domestic backlash. And then there's going to be an international concern because China is going to keep going. So, you know, some stats from last year, China invested the same amount just in clean energy as the GDP of Switzerland. So that's massive, by far the biggest investor in clean energy. So that kind of competitive advantage for China is going to grow if the US pulls back. And at the same time, you know, the Trump administration has very clear targets, you know, to kind of hedge in Chinese ascent. And so there's going to be a big trade off there. Because

the

rest of the world, of

course, has had four years to get used to the prospect that Donald Trump might well be re-elected president. And that obviously is what has happened. Is there a sense that the world has spent those four years just thinking about, OK, well, we're just going to have to figure out how to do this without the United States? And perhaps we could even steal a march on the United States?

Well, I think, I mean, to some extent, China has. But, you know, at the same time, it's important to notice that both other kind of big economic areas, so China and the European Union, are facing pretty large struggles internally with regards to their economy. So it is fair to say that, know, within the last four years, the policies that have been implemented in the US have shifted much in this transition space and have actually created markets for many companies, also for European companies that are starting to build facilities in the US or, you know, sell wind turbines to the US, the likes of Siemens Gamesa, for example, or Vesta as a Danish company. So the U.S. has been a massive driver of that growth. And I don't think there has been enough, you know, enough thought put into how that is going to get replaced, particularly in Europe, where we still see a very fragmented support scheme. Actually, the U.S. spends about as much green technology support as the US. The EU spends about as much as the US. But because it's so fragmented, we don't see these big investment projects happening in Europe. So that needs to change. And perhaps that's really an impetus for that to happen now. I mean,

the conversations happening up the hill at Davos this week will, of course, have been preoccupied with the restoration of President Trump and what that is going to mean for absolutely everything. But that aside, as far as you've been able to tell, was any progress made at Davos on such subjects as sustainability, clean energy transition, green technology, etc.? What I hear at the moment from Davos is two

things. One is that the conversation on climate is a bit low intensity or lower than it usually is. The conversation around nature and biodiversity risk really picked up. So I hear a lot of events and a lot of companies issuing their concerns around what's happening to the natural environment. So more kind of how much ecosystems we have in the future to sustain our livelihoods. So I think there is more action from the corporate side there, that corporates think about their supply chains and think about the vulnerability to ecosystem services that they have in their supply chain. So think about, you know, companies such as Nestle, which is the obvious ones, you know, when you're directly exposed to farming. And the second thing, I think it's extremely quiet around the finance and insurance industry in Davos, particularly since, you know, the six largest U.S. banks have just about two weeks ago dropped out of the net zero alliance kind of in fears of potential lawsuits in the U.S. for not, you know, financing and ensuring fossil fuel assets. So the finance industry, which usually has been kind of in Davos, a very prominent one talking about climate sustainability, green transition, you know, which projects they want to finance, where they want to pour money into is extremely quiet this year. You know, I don't know if that's necessarily concerning. I think kind of the fundamental rationale remains. So I think the effect of the Trump administration coming in is just that much less is said publicly about these projects. So perhaps it even takes a bit of the greenwashing out of the system, which might not be so bad. And what remains is basically the project where there is an actual business rationale.

Because is it not the case, though, that whatever Trump's objections to windmills and solar farms and whatever else he's likely to object to, it's all a bit of an irrelevance, isn't it? Because the tide at which he is flailing is only going one way here. I think I'm right in saying that in 2024, solar overtook coal in Europe's energy mix. I mean, this is what the future is going to look like, whether Trump likes it or not. And the energy companies know that better than anybody.

Exactly. So, you know, I think ironically, this is really a stance that goes against business. And at the same time, Trump, you know, puts himself down as such a pro-business guy, which is really not the case in this field. So as you rightly said, solar overtook coal and electricity generation. That happened years ago, if you speak about investment, because investment is kind of a leading indicator. So we're full in this transition, and that's not going to change. I think, you know, the only the only risk that I see is because Trump puts such an emphasis now on the oil and gas industry, on drilling for new oil and gas fields and all of that, that, you know, some of the oil and gas executives might see this as one of the final windows to kind of get new licenses for for exploitation. And, you know, we might see some oil and gas fields, you know, in the places like Alaska being tapped that otherwise would not have been tapped just because oil and gas executives see this kind of as a hatch for a potential future, which is unlikely to happen, but there is still a chance that we're going to need those. But in the broader trend, as you said, I don't think that's going to change anything. And I think, you know, as we go along into this administration's lifeline, we're going to see more and more opposition on these policies, both from business and also from Republican states. Because we shouldn't forget that a lot of the Republican states actually got many of the jobs now that were created in the last two to three years, you know, in battery manufacturing, in building up the plans for electric vehicles, in maintaining and upgrading grid infrastructure. So all of these things that brought money, brought jobs to these places that usually struggle economically. And I think we're going to see quite a bit of backlash. And the majorities that Trump has, you know, he has kind of a supermajority across all government bodies, but it's not so large. So if one or two Republican states, you know, per issue are unhappy with proposed rollbacks, then it's going to become complicated politically, unless, you know, he keeps signing executive orders. But there's only so much you can do with

that.