Sovereigns, Corporates




Analytical commentary

Donald Trump's actions remain unpredictable for the world and Russian public. Looking at what the US president has already done, can anyone dare to say what will happen at his long-awaited meeting with Vladimir Putin on July 16?

There is little doubt that the world stage has not seen anyone like Trump. Foreign leaders are as baffled by his rhetoric and his actions, as are many Americans.

The key to understanding Trump is that he is a pure transactionalist, i.e. benefit-driven nationalist. He doesn’t care about precedent. He doesn’t care about long-term alliances. He doesn’t interpret anything in purely cultural terms.

He sees all decisions in light of how does he, and now that he is President, how does the US gain or lose? It’s not about how the world benefits or loses. He’s a genuine nationalist. He is populist to the core.

Foreign Policy

Trump has promised to revise US trade agreements. NAFTA is being renegotiated. He has ordered tariffs on foreign steel and aluminum. He has ordered tariffs on tens of billions of imports from China. He may soon implement tariffs on EU cars.

As a transactionalist, he believes that since the US imports far more than it exports, in the end, US trading partners, including China, the EU, Canada and Mexico, will have to cede.


During his campaign, he repeatedly complained about how little NATO nations contribute to the overall cost of their defense. He said that must end. His view is that NATO nations need the US more than the US needs them. Therefore, they must act to increase defense spending or face consequences.

The Paris Climate Accord

The US pulled out of the Paris Climate Accord. Most interpret the reason for pulling out having to do with climate change. Wrong! It was that the accord would have required the US to transfer over $10 trillion to lower income countries over the next decade. This is why so many countries signed on. Almost all would have been recipients of funds coming from the US and Europe.


He ended US participation in the Iran Agreement because he intends on stopping, not simply delaying Iran building a nuclear weapon.  As a transactionalist, since Iran needs foreign income more than the US needs Iran, more sanctions on Iran, in Trump's opinion, will be effective.

North Korea

North Korea has moved towards the denuclearization of the Korean peninsula. This has happened because Kim is not sure if Trump will carry out his threats. Trump the transactionalist will do what he sees as best for the US, even if that threatens the stability in the Korean peninsula. Risks of instability in Asia are less important for him, than a nuclear threat from the Kim regime to the US mainland. This is a totally different calculus than we are used to seeing.


Relations with Russia are set to improve in practical terms. The transactionalist Trump could care less about the Ukraine and Crimea. They are of no national interest to the US. What’s more important is US-Russian cooperation regarding international terrorism, the threat from a rising China, energy supplies, etc. The on-going witch-hunt in Washington about everything Russian is not a winning message. Endless investigations won't stop Trump from implementing new policies towards Russia, they will only slow down the process.

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Natalia Porokhova
Senior Director, Head of Sovereign Ratings and Forecasting Group
+7 (495) 139 04 90
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