Tokyo stocks retreat amid geopolitical, economic uncertainties
Tokyo stocks retreated on Wednesday as investors grappled with heightened uncertainties surrounding US monetary policy and geopolitical tensions between Ukraine and Russia.
Ukraine not only dominates how the USA views ties with Russia today but has also laid the basis for what the relationship could be like tomorrow.
Ukraine not only dominates how the USA views ties with Russia today but has also laid the basis for what the relationship could be like tomorrow. While Sino-US relations are the focus of much of the global strategic calculus, it is the Russo-American relationship, regardless of how or when the war in Ukraine ends, which is clearly headed for a lengthy period of frosty ties. Mistrust between Moscow and Washington is at its peak and Western sanctions against Russia could remain in place for a long time to come as the Kremlin looks to lock in the territorial gains it has made over the past 15 years from the invasion of Georgia in 2008 to the occupation of Crimea in 2014 and the ongoing amalgamation of large swathes of eastern Ukraine into the Russian Federation. Even a year ago, though, it all looked very different when US President Joe Biden met his Russian counterpart Vladimir Putin in Geneva on 16 June 2021 hoping to lay the foundation for what Washington described as a “predictable and stable relationship”. In a joint statement issued after the Geneva Summit, the leaders had announced the Strategic Stability Dialogue to “lay the groundwork” for future arms control and risk reduction measures. There was talk from the American side about the need to establish the “rules of the road” while the Russians delineated areas of possible agreement and differences without any visible rancour. In the following months, Biden Administration officials – while wary of Russian over-reach – understood the value of guardrails to keep in check the adversarial aspects of the relationship, notes Steven Pifer of Brookings. After all, within a week of being sworn in as US President, Mr Biden had agreed with Mr Putin to extend the New Strategic Arms Reduction Treaty to 2026. Throughout most of 2021, diplomatic and other contacts between the USA and Russia broadened, the Strategic Stability Dialogue was formally launched in July 2021, and there seemed to be a reduction in cyber-attacks against sites in the USA emanating from Russia. But matters soon went rapidly downhill. Despite a series of telephonic conversations between Mr Biden and Mr Putin in which the former tried to dissuade the latter from acting against Ukraine reportedly with a mix of threats and concessions, Russian forces entered Ukraine in February bringing an end to the modest hope of stability and predictability in US-Russia relations generated in Geneva.
Now, four months into the war, strategic experts have taken notice of the desire expressed recently by both Washington and Moscow to resume the US-Russia dialogue on strategic stability at some point. While that is not going to happen till the Ukraine war ends, it is also a signal that both are preparing for life after the conflict. Experts though say the mistrust will make working together with a challenge even on issues where interests converge – arms control, climate change, and Afghanistan. Hawks in the American establishment have taken the position that improving bilateral ties will require Mr Putin’s departure from the Kremlin and his successor making significant policy changes to demonstrate Russia will play by the rules of the international order. They are likely to have a long wait.
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