Biden’s Plans for Russia

With the fanfare of a highly anticipated heavyweight fight, the leaders of the United States and Russia met at a summit in Geneva, Switzerland on Wednesday. 

Much of the day’s news cycle was dominated by the meeting between Presidents Joe Biden and Vladimir Putin, with speculation running rampant over what they’d be talking about. 

It’s no secret that the relationship between the two countries has been deteriorating for years. 

While there had been some promise of strong ties between the two sides in the early days of President Obama’s term, those hopes were dashed when Russia annexed Crimea in 2014. Since then, it’s been a rocky relationship marked by accusations of election interference, the proxy war in Syria, nuclear weapons proliferation, and the recent cyberattacks against American assets. 

Much like the U.S.’s recent relationship with China, its crumbling ties with Russia have led to talk of a new cold war and the kinds of geopolitical tensions that lead many to wonder if things can ever be repaired between the two sides. 

Biden and Putin covered a range of topics. Cybersecurity was a given in light of recent attacks like the one against Colonial Pipeline, but other issues like foreign affairs concerning Belarus and Ukraine, diplomatic expulsions on both sides, and human rights related to political prisoners in Russia also came up. 

The consensus on both sides was that, while relations are bad, there is some optimism that progress can be made. Following the talks, ambassadors will be returning to their posts in both Washington and Moscow, but it will take months to see just how productive things will be in other areas that were discussed. 

Whether or not things ultimately improve, it’s important to pay attention to what happens over the next few months and years because of the far-reaching effects. 

Despite longstanding and ongoing tensions, Russia is an important trading partner with the U.S. 

In 2019, goods brought into the U.S. from Russia totaled $22.3 billion and included crucial categories like fossil fuels, precious metals, iron and steel, and fertilizers. On the other side of that, the U.S. exported $5.8 billion worth of goods to Russia in the same year. Those exports included machinery, aircraft, vehicles, and medical tools, among others. 

Likewise, both countries enjoy a good degree of foreign direct investment in each other. In 2019, the U.S. invested $14.4 billion in Russia while Russian investment totaled $4.4 billion in U.S. stock. 

And that’s the murky world of geopolitics in a nutshell. 

Countries that have tepid relationships at best — and adversarial relationships at worst — still rely on each other economically. 

It’s with that in mind that President Biden will have to navigate his relationship with President Putin. His approach is already seen as much more firm compared to President Trump, who many believed to more or less have been in Putin’s pocket during his term. 

According to President Biden, Putin said to him that “we understand each other.” If nothing else, that implies that Putin at least sees Biden as a worthy adversary who willingly draws a line, a stark contrast to a series of predecessors who more readily made concessions to the Russian leader. 

Only time will tell what kind of relationship the U.S. and Russia will have under Biden’s watch, but given how much the two countries trade with and invest in each other, it’s a story worth watching because of the economic impact. 

It’s very doubtful that the two countries will ever stop competing, especially given Russia’s ties with China. At the very least, however, there is now a clear picture about how the Biden administration’s policy decisions will be reached. 

Among the critical issues of human rights, diplomatic ties, and military conflict, the groundwork was laid to let Russia know that there will be consequences if it acts in a way that harms other nations. 

That’s why this big push toward cybersecurity and protecting critical infrastructure is at the heart of future dealings with Russia. 

The technology already exists, especially on the energy front. The company behind it is growing. 

Soon, it will be a household name in protecting American interests over the next few years. 

Keep your eyes open,

Ryan Stancil
Editor, Daily Profit Cycle

Ryan Stancil is an editor and regular contributor to Daily Profit Cycle. He’s been active in the financial publishing industry for more than half a decade, offering insights and commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments. His readers appreciate his "tell it as it is" writing style, where he always offers a fresh new perspective on what's happening in the market and leaves nothing unsaid.