Will Trump and Putin Establish a New World Order or a New Cold War?

Without knowing what had been discussed during the hour long or brief conversation, depending on which version of the events you choose to believe, it’s speculative at best and certainly debatable whether there is something more sinister going on between the arched rivals of old.

A New World Order

Trump may well be looking to give the U.S the upper hand in a power play that has seen China rise to meteoric levels in both economic and military, but is a U.S – Russian going to be acceptable to Republican voters, America’s allies and even America’s enemies, who have yet to show themselves.

There is three and a half years remaining in Trump’s presidency and, assuming that the least popular president of modern times is not re-elected, Trump will likely to leave the Oval Office with a Cold War of far greater magnitude to deal with than seen in history.

Putin is certainly unlikely to be going anywhere anytime soon and as for the Chinese, China’s policies are generally consistent, irrespective of who sits at the helm, so we may see the U.S and Russia collusion limit China’s powers for now, but how will Trump’s successor be able to manage what will likely be a diplomatic disaster of immense magnitude, pulling back from a forged Russian-American allegiance, whilst trying to restore what little there had been between China and the U.S.

One can only imagine how things would unfold in the years to come, but Putin will certainly feel betrayed and China may just take advantage of any such betrayal… It does sound like a Cold War in the making, though this time it won’t just be Russia that the U.S will need to keep an eye on, but also China and the allies it manages to sweep up along the way.

Putin has time on his hands, form an allegiance, make all the promises needed to get to rub shoulders with the world’s largest economy and gather as much fruit as possible before winter sets in. It’s not going to last and Putin will be all too aware and will therefore be incentivized to be a friend as the prize being Russia’s return to centre stage and an end to the economic battering it has been given as a result of the sanctions imposed following the events in Ukraine back in 2014.

If it does play out as some may fear, the next question would be on which side members of the G20 and beyond would sit, China or the U.S – Russian Allegiance that may become referred to as the U.S.R…

Obviously the Far East would be ill-advised to go against the Chinese, which would leave Japan and Taiwan out in the cold, though Japan would have little choice but to side with the U.S President else face the prospect of falling into the hands of the Chinese. Britain, normally a trusted ally of the U.S, may also think twice about joining a U.S.R alliance, further isolation after leaving the EU likely to be an economic disaster, which leaves Israel in a sensitive situation as well.

Foreign Policy Shifts or Status Quo

The reality is that few nations would likely be willing to break down diplomatic relations developed over decades in the interest of salvaging what will be construed as a blip in U.S – Global ties, assuming of course that it all ends in tears and Trump doesn’t salvage middle America and give America back to its people. This was almost certainly the reason behind the disbelief on the faces of G20 leaders at the Summit dinner, the prospects of a new world order and then a dismantling, not to dissimilar to the one that Trump is currently engaged in, a threat to the borders of many developed nations once Trump has turned out the lights. But there is one other thing that world leaders will have to consider and that is, Trump’s successor and voters will know who their friends are and everybody’s friend is nobody’s friend, so how leaders play the game will dictate how embedded a new world order would be.

So, while world leaders will watch closely how relations develop between Trump and Putin, the real issue will be on what’s next, with few if any likely to believe that such an allegiance will last beyond the current U.S President and many will be hoping it fails before it starts, such an outcome the most favourable for those looking for geo-political stability.

Goldman Sachs had recently commented that a war or a recession would be needed to return volatility to the markets, well, we could see at least one of the two and in retaliation to a likely reversal of Trump’s allegiance with Russia, we could see Russia and China unite and that is certainly an outcome most would like to avoid.