Somewhat surprised at China's and Russia's reaction / negotiation with Trump

[DawgWCK]

First Russia - Putin doesn't seem to want to capitulate or seems to be on no time table to end the war despite Trump's team best efforts. With the thousands of lives being lost yearly by Russia I incorrectly assumed Putin might want to slow this thing down, declare victory and expand their footprint. He keeps attacking and seems to want to prolong this thing. I said it would be over by end of August, changing that opinion fairly quickly.

China, based on a Wall Street journal piece and several podcasters i listen to report that Xi is all out of sorts with these tariffs and is really looking at negotiation and compromise. The potential unrest at home has the Chinese Leadership at the negotiation table. i assumed China might capitulate at some point, but figured they would be a very tough nut to crack, perhaps not.

Both of these negotiations could change on a dime, Russia could shut down hostilities tomorrow and China could play even harder ball with the tariffs but neither is what I expected to date based on reporting and observation.

 

[Georgia Knight]

Assuming these dynamics are all correct (and not questioning your comments, but the broader Western analysis of those dynamics), what it reflects is that Putin has a firmer grasp on power in Russia than Xi does in China, which shouldn't be that much of a surprise.

Putin is able to control Russia with raw power. While the CCP has its own capacity for enforcement, a major source of its domestic strength has been the gradual improvement of quality of life for residents which has hit a number of bumps in recent years - including Trump Trade War 1, covid, bursting of its real estate bubble (which was a major factor in domestic investments), and Trump Trade War 2.

China can't transition away from its reliance on exports and maintain its domestic support the same way that Russia was able to protect itself from Western economic attacks post-Ukraine invasion.

The issue with the current Russia negotiation is Moscow's demand for territory it currently doesn't occupy, which is a particularly unreasonable request. It will be interesting to see how Trump responds to Russia's recent needling over his "Putin has changed" comments over the weekend, his personal response will be a notable signal to his commitment to a deal in the short term. Additionally, what a Trump Administration pivot on that front would look like is also a question.

The only real card left in the deck, short of hot war, is cracking down on Turkey and India's facilitation of Russian energy exports, as well as EU making some hard sacrifices given its reliance there. Maybe some of the Middle East pieces may help with Turkey on that front? Maybe there is some economic leverage with India connected to trade deals?