Economic, Middle East, Politics, Society, United States

Trump’s capriciousness is undermining international stability

GEOPOLITICS

Intro: Trump boasted he would make America great again. What bitter irony that he’s now presiding over its slow demise as a superpower

President Donald Trump has never been shy of hubris in his self-declared role as a negotiator of world peace.

When sworn into office for the second time in January last year, the 47th US President claimed he would be ushering in a new era: “My proudest legacy will be that of a peacemaker and unifier,” he proclaimed.

Just days ago, following the award of the Nobel Peace Prize to UN human rights commissioner Navanethem Pillay and his evident belief it should have gone to him, he went further: “I have saved more lives than anyone in history.”

And yet since his inauguration it has become abundantly clear this president’s most enduring legacy may well be the greatest threat to the world order for decades.

From the battlefields of Ukraine to the oil-rich Persian Gulf and volatile waters of the Red Sea, the consequences of Trump’s erratic foreign policy are being felt across the globe.

At precisely the moment when the world desperately needs calm and experienced leadership – with 130-armed conflicts raging globally – it finds itself dependent on a US president whose capricious behaviour is directly undermining international stability.

The missile attacks on Riyadh airport by Yemen’s Houthi rebels, which killed 14 people and injured hundreds more, represented a chilling and unprecedented escalation in a Middle Eastern conflict that threatens to plunge the global markets into further imminent chaos.

For those in Saudi Arabia and beyond, it remains a terrifying reality that the Houthis, an Iranian-backed militia whose fighters have often been dismissed as little more than barefoot tribesmen, now not only have the capacity to throw the Arab world’s largest economy into further turmoil but also to inflict such economic damage on the West that it could dwarf the ongoing war between America and Iran.

To date, much attention has been focused on Iran’s blockade of the Strait of Hormuz, the narrow waterway through which enormous quantities of the world’s oil and gas ordinarily pass. The disruption sent shockwaves through energy markets, caused prices to soar, and worryingly threatened supplies of fuel and fertiliser, the lifeblood of industrial and agricultural production.

Several hundred miles to the south-west, however, lies another maritime bottleneck that might yet prove even more damaging, particularly for Britain and Europe.

The Bab al-Mandab Strait, separating Yemen from the Horn of Africa, is the gateway to the Red Sea and, ultimately, the Suez Canal.

It is one of the great arteries of international commerce, carrying not only oil and liquified natural gas but container ships transporting everything from Chinese cars to Japanese electronics and white goods. If the Houthis succeed in closing this passage, the consequences could be catastrophic.

The Red Sea corridor handles roughly 30 per cent of global container traffic and, while it is one thing to pay more to fill your car, it is quite another when the supply of vehicles, fridges, washing machines, and pretty much everything else is suddenly imperilled.

This is not a theoretical threat. The Houthis have demonstrated through their attacks on Riyadh airport that they possess missiles and drones capable of penetrating defences in Saudi, a country that has spent billions on sophisticated military equipment.

And at a moment when the future of world trade has seldom looked more vulnerable, the current US president is so unpredictable we can no longer assume Washington would intervene in the Bab al-Mandab Strait to protect global commercial shipping.

While the US Navy may have done so under Joe Biden – in 2024 American carrier strike groups were deployed to counter Houthi attacks on shipping in the Red Sea, albeit ineffectively – the current US President has demonstrated an alarming unwillingness to protect anything other than American interests.

Only last month, for example, he called off a missile strike against the Houthis in return for a guarantee that attacks on US vessels in the area would not take place. And he will be fully aware that if he launches strikes, the Houthis may well attack US bases in the Middle East.

Despite his bellicose rhetoric, the truth is that President Trump looks desperately weak when confronted with the realities of international power. Supporters of Trump believed they were electing an “American First” president that would extricate them from expensive foreign entanglements, rebuild the economy, and end the military adventures of past administrations.

Instead, their erstwhile hero has achieved almost precisely the opposite. And with midterm elections fast approaching, the president is staring in the face the political consequences of his overseas adventures. With just over two weeks to go before the vote, polls show he is failing to arrest his declining popularity.

This is the primary reason why Trump decided to ease sanctions on Russian diesel, pursuing short-term political expediency at the expense of long-term international stability.

For years, Western policy towards Vladimir Putin has rested on the principle that Russia must pay an economic price for invading Ukraine.

Yet now the American President is prepared to loosen those restrictions to ease the energy crisis and attempt to bring down prices in the US.

The message this sends out is beyond appalling. While Western sanctions have never been watertight, and European countries have permitted exceptions when vital economic interests were at stake, there is a big difference between limited exemptions and the world’s most powerful democracy handing Russia a lifeline. It raises the possibility that the West’s entire strategy towards Ukraine could unravel.

At the same time, Trump continues to espouse extravagant and fantastical claims about his diplomatic achievements. Consider his announcement that there had been an energy ceasefire in the war between Russia and Ukraine, and that both parties had agreed. This was greeted with surprise in Kyiv. Relentless Russian attacks have continued.

The louder the threats and more extravagant the pronouncements, the greater the impression of a man desperately posturing while events slip beyond his control.

Together, these crises cannot be considered separately. Russia’s invasion of Ukraine has disrupted our access to energy supplies from eastern Europe while the confrontation with Iran has threatened supplies from the Persian Gulf. Now the Houthi escalation threatens a crucial commercial route linking Europe to Asia. In effect we are facing a disastrous triple whammy.

While Trump blusters, Britain and France may promise further assistance to Saudi Arabia, but neither possesses the resources required to replace American power, for so long the guarantor of international security and free trade.

And herein lies perhaps the most unsettling prospect of all. It may fall to China, possibly alongside India, to broker an agreement between the Houthis, Iran and Saudi Arabia that removes the threat to international commerce.

Beijing has every reason to want this outcome, with its export economy depending on functioning trade routes. Yet their intervention would be one of the most troubling kind: what might this authoritarian state ask in return?

The erosion of America’s world leadership did not begin with Trump. But under this president it is accelerating at a terrifying pace.

The bitter irony is that the man who promised to make America great again may instead be presiding over its great dismantling as an international superpower.

Standard
Britain, Economic, Government, Iran, Politics, Russia, Saudi Arabia, Society, United States

A winter of global discontent beckons

GLOBAL ECONOMY

Intro: As energy and food prices soar, we face a winter of global discontent facilitated by the West being run by failures of truly historic proportions

Houthi rebel forces have swept down the western coast of Yemen, seizing the strategic Red Sea port of Mokha (long renowned for its global coffee trade) then Dhubab, another port, before taking Perim Island at the mouth of the narrow Bab al-Mandab Strait that connects the southern end of the Red Sea to the Indian Ocean.

Many will say these are far off places of which we know nothing and care even less.

Perhaps. But what has just happened there is about to hit us even harder at the petrol and diesel pumps, the supermarket checkout counter, in monthly mortgage payments, bank loans, and household food and energy bills. Bab al-Mandab is Arabic for “The Gate of Grief” – and grief is what the global economy is in for this winter.

Oil and gas prices have already soared since Donald Trump’s war on Iran resulting in Tehran seizing control of the Strait of Hormuz, a development the President managed somehow not to foresee.

Since then the US Navy has been deployed to wrestle back control, with mixed results.

Before Trump attacked Iran, around 25 per cent of global seaborne oil trade passed through the Strait of Hormuz and 20 per cent of global liquified natural gas (LNG). Oil flows are now less than half of that (perhaps no more than a third) and almost no LNG at all is getting out.

It’s hardly surprising, then, that oil and gas prices have soared. But nothing like the trebling and quadrupling of prices in previous energy crunches: that’s because several workarounds were instigated, none more important than the East-West pipeline from Saudi Arabia’s oil field heartlands to the oil port of Yanbu on the Red Sea.

The Saudis built this 750-mile pipeline in the 1980s, as the Iran-Iraq war was raging, precisely as a contingency for the Strait of Hormuz being shut. This year it became the most important piece of energy infrastructure in the world, its daily capacity of 7 million barrels doing its bit to mitigate the rise in oil prices.

No longer. Which brings us back to the Houthis.

Just as the Islamic Revolutionary Guard Corps (IRGC) threatened all vessels trying to transit the Strait of Hormuz, so the Houthis, Shia insurgents funded and armed by the IRGC, now threaten all shipping attempting to pass through the southern exit of the Red Sea.

The two most crucial maritime chokepoints in the world are now under the thumb of a hardline Iranian regime and a proxy doing its bidding. It would be hard to think of a more disastrous outcome from Trump’s war on Iran. But there’s worse.

As the Houthis pushed south to take control of Bab al-Mandab, the Saudi East-West pipeline came under attack from drones dispatched by Iraqi Shia militia, yet more Iranian proxies.

Even the dim-witted can surely see a pattern here.

The drones took out pumping stations, forcing the Saudis to close the pipeline for at least six weeks for repairs. This has crippled Saudi oil exports in the process, a harbinger of the global spike in oil prices to come.

This week the benchmark Brent crude oil price hit almost $110, the highest since May, before falling back a bit. Aramco, the Saudi national oil giant, told European refineries there would be no deliveries next month. The prices of what’s refined from crude oil – jet fuel, petrol, diesel – are rising fast.

Tehran has, in effect, opened a second front in its war with America, with huge consequences for the global economy – and Trump, still struggling to escape from the first front (which he started), has no idea what to do about it.

The Saudi crown prince, Mohammed bin Salman, has pleaded with the US President for military help to repel the Houthis. Washington will likely be reluctant to assist, mindful that the Houthis survived a massive US bombing campaign, lasting over 50 days and involving 1,000 airstrikes, in the spring of 2025.

The Saudis are certainly in no position to dislodge the Houthis on their own. The group already controls a big chunk of northern Yemen, including the capital, Sanaa, despite previous Saudi military interventions on behalf of the beleaguered Yemeni government.

Now that the Houthis have their foot on the Saudi oil-export windpipe, they are going nowhere fast.

TWO

Sometimes it really doesn’t rain but it pours. The coming global energy crunch will be compounded by the fact that Ukrainian drones have taken out a third of Russian diesel-refining capacity. Russia is now having to import diesel from India, pushing up global prices even further.

Russia is retaliating by sending its drones to hit Ukrainian grain infrastructure and exports going through the Black Sea, seriously hindering the amount of grain getting out from one of the world’s great bread baskets.

It’s a prelude to the soaring food prices to come. Farm machinery is powered by diesel. So that cost is rising. So is the cost of fertiliser. Around 20 per cent of global supply used to come through the Strait of Hormuz. Not now. The upward pressure on food prices will become relentless.

Suddenly we’re looking at the prospect of soaring energy and food prices, as oil and grain markets buckle. A new broad-based inflationary surge is coming down the pike.

The Bloomberg commodity index has already risen by 48 per cent this year. That’s now working its way into consumer prices.

UK inflation is back over 3 per cent – with more rises to come. European gas reserves are at historic lows, with time running out to replenish them for winter. So, gas is about to become much more expensive, too.

OFGEM’s energy price cap is forecast to rise by as much as 25 per cent in January.

We are now moving into a world of higher interest rates. The European Central Bank increased its benchmark rate last week; the US Federal Reserve did the same just days ago. The Bank of England kept its rate on hold. But it’s only a matter of time before it starts raising rates too. Now that inflation is back, it will have no other choice.

We are looking at higher interest rates for as far as the eye can see. The chance of reviving the housing market is non-existent. While all this unfolds, politicians on both sides of the Atlantic debate and promise irrelevancies while ignoring what really matters.

Britain has been consumed by rows over political donations which in the grand scheme of things barely matter a jot, but allow politicians to posture at their hypocritical worst.

America has a President – who’s caused much of the global economy’s turmoil – trying to bribe voters with a $5,000-a-head “dividend”. France has a lame-duck President who talks a lot and does nothing as his country sinks into a fiscal morass.

German Chancellor Friedrich Merz might not survive next week following a series of bad results in elections.

The markets, of course, know exactly what’s happening. Inflation is coming back with a vengeance, the war on Iran is being lost, and the global economy is at the mercy of Islamists bent on our destruction.

It should come as no surprise the bond vigilantes demand ever higher interest rates. A risky world means ever-rising risk premiums.

We face a winter of global discontent with a political leadership missing in action, obsessed with an agenda that means little and is of a self-serving discourse, wholly inadequate to the challenges about to confront us. When the IRGC and the Houthis hold the upper hand, nobody can be in any doubt we’re being run by failures of historic proportions.

Standard
Britain, Europe, NATO, Russia, Ukraine, United States

Is Putin a drowning man?

PUTIN’S WAR IN UKRAINE

Intro: The paranoid dictator has built an impenetrable echo chamber around himself, within which he is told only what he wants to hear

Vladimir Putin’s war to subjugate Ukraine is going from bad to worse for the Russian tyrant.

Originally billed as a three-day “special military operation”, it is now in its fifth year, longer than Russia fought in World War One, and longer than the Soviet Union took to repel then defeat Nazi Germany in World War Two.

Nor is there any end in sight as Putin faces yet another summer of setbacks. The Russian military has long ceased to make any territorial gains in Ukraine and the human toil continues to mount.

British intelligence estimates Russian war deaths at half a million. At least another half a million have suffered horrible, life-changing injuries.

Putin is running out of manpower to replace casualties of over a million. His military is being forced to offer enlistment bonuses of up £60,000.

This sounds like a lot of money to most young Russians – until they discover that the average life expectancy of a new recruit once deployed – after training – on certain sections of the frontline is between just 20 and 35 minutes.

Putin is being forced to consider conscription. But that would make an unpopular war even more disliked.

Ukraine has fanned the war’s unpopularity by taking it to Russia’s home front. Increasingly sophisticated, long-range, lethal drone strikes have hit oil refineries, arms factories and other critical infrastructure deep inside Russian territory. They even managed to cripple an oil refinery in Siberia – 1,200 miles from the Ukrainian frontline.

Almost a third of Russia’s oil-refining capacity has been put out of service, some of it for a long time. Fuel depots have also been destroyed. As a result, there are now fuel shortages in more than a dozen regions across the country, even in Moscow (normally shielded from such inconveniences), where bad-tempered drivers are queuing ever longer for fuel.

There are now plans to import gasoline, quite an embarrassment for a country which pumps out 9 million barrels of crude oil a day.

It’s even worse in Crimea, which Putin annexed from Ukraine in 2014. The peninsula is home to a massive Russian military presence, a vital bridgehead supplying Russian forces on the frontline.

But a relentless series of Ukrainian strikes using new, more powerful, semi-autonomous drones on roads, bridges, railways and ferries has effectively isolated Crimea from Russian-occupied eastern Ukraine.

The drones stalk petrol tankers and military vehicles travelling on the main highways in and out of Crimea. Unsurprisingly, freight traffic has collapsed. The ferries have stopped. Fuel is scarce. And blackouts are common. Russia has even had to remove its powerful Black Sea fleet from Crimea to put it out of harm’s way. Quite the humiliation, since Ukraine doesn’t even have a navy.

It’s not clear how much Putin knows about any of this. The paranoid dictator has built an impenetrable echo chamber around himself, within which he is told only what he wants to hear.

It is populated by a mixture of senior military lackeys and old cronies from his KGB days. Bad news, they have easily worked out, isn’t a career-enhancing move. So they don’t give him any. They even produce a specially sanitised, bespoke version of the news for his delectation.

Stuck in this vortex of disinformation and downright lies, Putin often doesn’t have a clue what’s actually going on.

But even he couldn’t ignore the ominous dark clouds of burning oil over the Moscow sky some days ago, nor the black rain falling across the capital.

Ukrainian drones had struck the city’s main oil refinery again, this time putting it out of action for maybe 18 months and ensuring fuel shortages will remain a daily reality. Another humiliation, given Moscow has some of the best air defences in the world. Putin’s response was to retaliate.

He unleashed more than 70 missiles and almost 500 drones on Kyiv and other Ukrainian cities, killing at least 21 and wounding 85 in the capital alone.

The death toll will rise as rescuers rake through the rubble of some 20 residential blocks. It’s a gruesome business, but Putin is in no mood for peace.

His echo chamber is still telling him he can win – and nobody is within his earshot to gainsay or contradict that.

There are still more than 700,000 Russian troops massed in eastern Ukraine, maintaining deadly pressure on Ukraine’s fortress belt in Donbas which, if it were to fall, would put the whole country in peril.

Certainly, Russia has far more shells to fire than Ukraine and can deploy swathes of missiles and hundreds of guided bombs a day on a scale Ukraine cannot come near matching.

And frontline reports from battle-hardened Ukrainian soldiers who are aware of Russia’s suffering and setbacks, are reporting that there is still no sign of its forces collapsing.

Putin is being told all that – and more. But the home front continues to deteriorate. The initial war-driven stimulus is petering out: the economy grew by only one per cent last year, it will be less than that this year.

Unemployment remains very low. But that merely reflects the loss of so many lives on the battlefield and the fact so many other young folk have fled the country to escape military service.

Inflation and interest rates are cripplingly high. The national debt and the annual budget deficit were in fine fettle when the war started. But while the debt is still low, budget deficits are rising fast as defence devours almost 10 per cent of GDP (and half of all state spending). The national wealth fund, which has been pillaged to pay for the war, has run out of liquid assets to finance it.

More than 60 per cent of Russians now think economic conditions are worsening, and 56 per cent believe that the war is hitting their living standards.

Concerns about a deteriorating economy are adding to the growing anti-war mood. Public opinion is clearly souring on Putin’s “special military operation”.

Dictators, of course, don’t have to bother about public opinion – at least not for a while. But there’s always the risk they will do something stupid.  

You might think that a stalemate with no end in sight and an increasingly restless populace would encourage Putin to call for a ceasefire and sue for peace. Donald Trump, after all, has said he can keep all his ill-gotten gains in eastern Ukraine in any peace deal and can look forward to all manner of lucrative Trump-inspired business deals. 

Putin is just as likely, though, to double down and strike elsewhere to deflect attention from Ukraine and rouse Russian patriotism. The Kremlin is already waging extensive cyber and hybrid warfare against the Western democracies, including Britain.

That could be ramped up, creating various crises and confrontations on the way, keeping Ukraine out of the headlines.

More seriously, Putin could threaten Poland or the Baltic states or even Scandinavia, contriving a small-scale incursion to test NATO’s resolve.

The timing would be propitious for him: NATO has never looked more fragile, thanks to Trump’s hostility to the European democracies and his penchant for dictators like Putin.

The Trump administration has already cancelled the deployment of an armoured brigade to Poland and withdrawn an infantry brigade from Romania.

Pete Hegseth, the blowhard US defence secretary whose animosity to Europe knows no bounds, is reviewing what further US troop withdrawals should follow. He wants to move quickly.

Nothing is more likely to embolden Putin to seek a way out of his Ukrainian troubles than a show of weakness on NATO’s flank.

One expert has likened it to “drowning man” syndrome – the desperate measures a struggling swimmer will take to keep afloat, even pushing others under water to stay alive.

Thanks, then, to the resolve and bravery of the Ukrainian people, Putin is that drowning man.

The NATO allies have the resources and determination not to be pushed under by him.

If they stay resolute and united he will eventually sink to the bottom – if only President Trump didn’t keep indicating he’s minded to throw him a lifebelt.

Standard