Russian President Vladimir Putin warned recently that the world may be moving toward an unprecedented economic crisis. This will be caused by the confrontational trade policy and protectionism pursued by the United States.
Putin did not directly name US President Donald Trump. But he certainly was referencing Trump’s initiated tariffs. He has also pulled out of trade deals. The Russian president was criticizing a new era of protectionism that is emerging and therefore “breaking” the free trade system responsible for global prosperity.
“Not Trade Wars, Trade Peace”
“Today we need not trade wars or even trade truces, but trade peace,” Putin told an economic summit in Saint Petersburg. Japan’s Prime Minister Shinzo Abe and French President Emmanuel Macron attended the event as well.
Global trade rules “should be clear and the same for all.” But “breaking the rules is becoming the rule,” he said in another apparent jab at Trump. The US president has abandoned a Pacific free trade deal and forced a renegotiation of the US pact with Canada and Mexico.
The Russian leader said that a combination of sanctions, trade barriers and a lack of trust was hugely dangerous and “could lead to a systemic crisis the likes of which the world has not seen before.”
Putin also seemed to take a poke at the United States justifying tariffs on steel, aluminum and cars, using national security concerns.
“Today we are talking about a new type of protectionism, about the use of clear pretexts of protecting national security. For what? To pressure competitors or wringing out concessions,” said Putin.
“This could knock the world economy far back to the epoch of subsistence farming,” he added.
Putin was not alone, IMF chief Christine Lagarde, made similar remarks. She warned of the “determination of some to rock the system that has presided over trade relationships”.
Great Mistake to Resort to Protectionism and Unilateralism
She said it would be a “great mistake to resort to protectionism and unilateralism.”
Putin must be very interested in rallying the support of other nations damaged by US trade barriers. Russia needs additional foreign investment and access to markets. Europe and Russia have criticized the US withdrawal from the Iran deal. And the European Union has indicated it will seek to protect its firms with investments in Iran from the US sanctions.
Putin lamented Trump abandoning the Iran deal saying it raised problems for international cooperation.
“Every four years the US holds presidential elections … if every four years they revisit documents they sign what kind of planning horizon will we have — none,” Putin said.
Putin did express hope a new agreement could be reached.
“The US president is not closing the door on negotiations,” Putin said. “I think that all is not yet lost.”