Army, Grain, Energy, NATO, … Putin’s War in Ukraine Allows America to Win on All Fronts.
Behind this success, Joe Biden, who many saw as being at the end of his rope and practically senile when he arrived at the White House.
He was said to be tired, at the end of his rope, almost senile. In 2022, Joe Biden won two battles. Not only did the Republican tidal wave in the Midterms of early November 2022 not take place as expected. But Washington's unwavering support for Ukraine makes the United States the big winner of the sequence on a global level without a single GI having to set foot on Ukrainian soil.
Undeniable geostrategic, economic, military, and political gains.
NATO, not so long ago judged "brain dead" by Emmanuel Macron, has been strengthened. American industry is reaping contracts and liquefied natural gas “made in the US” is supplying a thirsty Europe, deprived of Russian gas. It is as if the invasion of Ukraine in the spring of 2022 and the recent retreat of the Russian army had allowed the consolidation of American hegemony over the Western world.
Against a backdrop of protectionism and unabashed economic nationalism, Joe Biden's America can now devote itself entirely to the technological war against its only great rival, China. Europe, which had succeeded in playing a united front during COVID-19, has been weakened and divided, with a Franco-German tandem in tatters.
The European Union may speak of sovereignty, but it does not espouse any of its attributes. A real defeat.
NATO: a divine resurrection
In response to Moscow's aggression against Ukraine, the United States is flexing its muscles on the Old Continent. While the number of American soldiers has decreased since the end of the Cold War, there are now more than 100,000 again - a first since 2005. This shows their NATO allies that they can continue to count on America, at a time when the Russian threat is stronger than ever.
The Atlantic Alliance is no longer “brain-dead,” as Emmanuel Macron stated in 2019. And its rise in power is strengthening the influence in Europe of the American sponsor, its most important member. “NATO has been revitalized by Russian aggression and by a cohesion of Europeans enabled by the leadership of the Biden administration,” observed a European diplomatic source.
However, doubt prevailed a year earlier. NATO was in a kind of chaos after the withdrawal from Afghanistan in August 2021, decided unilaterally by the White House, without consultation with its partners. The Russian invasion has changed the situation, all of Putin's actions have only strengthened the unity of the alliance. It is notably through NATO, since February 24, 2022, that the Europeans and the United States coordinate the delivery of military equipment to Ukraine.
The American military involvement in the war weighs heavily within the Alliance: more than 2.5 billion dollars worth of weapons have been supplied by the Pentagon to Kyiv, according to the Kiel Institute for the World Economy. Pledged to deliver the amount of 15.2 billion. Washington spends two to three times more on defense than all its allies combined, which explains its weight. Not to mention its intelligence and cyber capabilities.
Within the Alliance, the war has only increased the authority of the United States, which warned in the autumn of 2021 of the imminence of an invasion that many chancelleries did not want to believe in. Joe Biden's reassurances since the beginning of his mandate have also restored the Europeans' confidence in their partner, in contrast to the years when Donald Trump castigated an “obsolete” alliance.
The billionaire has even admitted to threatening his allies, described as “deadbeats” for not reaching the 2% of their GDP devoted to their defense, to deny them his protection in case of an attack from Russia.
The influence of the Biden administration in the direction NATO is taking also concerns China, mentioned for the first time in the organization's “strategic concept” at the Madrid summit in June 2022. While the document calls Russia “the most significant threat,” it also considers the Chinese regime to pose “systemic challenges.” Washington expects its allies to be fully aware of the challenge China poses.
Could this go as far as expanding NATO's activities to the Indo-Pacific?
As a price for its involvement in Europe, the United States could demand that its European allies become more engaged with it in Asia, in the face of Beijing. This could be more the case in the future under a neo-Trumpist Republican administration, or even a Democratic one, if Indo-Pacific competition becomes more assertive. It remains to be seen whether NATO members would accept such a redefinition of the organization's missions.
Energy: Europe under perfusion of American liquefied natural gas
There is the veneer of altruism. And then the cold reality of economic calculation. “We have to make sure that families in Europe can get through this winter and the next,” Joe Biden said in March 2022 at a meeting with European Commission President Ursula von der Leyen.
As Putin began to play with the Russian gas tap and the Europeans decided to wean themselves off it, Washington pledged to supply an additional 15 billion cubic meters of liquefied natural gas (LNG) to European markets by 2022.
American LNG producers immediately saw the bargain: produce, transport, and liquefy at American costs - very low - and sell it at European rates - very high. A gift from heaven.
Biden's promise could be exceeded. In the first half of 2022, LNG exports (all countries combined) rose by 20%, and almost two-thirds of them went to Europe. America has considerable potential. Firstly, because there is a political consensus to go even further in shale gas. Second, they have the most extensive pipeline network of any country. And finally, because they are investing heavily in liquefaction terminals.
All around the Gulf of Mexico, south of Louisiana, Texas, and Florida, an LNG revolution is taking place. America currently has only eight liquefaction terminals. But five are currently under construction, 12 others have already been approved and are awaiting construction, and eight permits are being processed, according to records from the Ferc, the federal energy regulator.
Since the early 1980s under Reagan, the United States has had a dream of cutting Europe off from Russian gas. They put enormous pressure on the Nord Stream 1 pipeline to never see the light of day and did it again years later with Nord Stream 2, going so far as to threaten sanctions against companies that would participate in the project. The war in Ukraine is for them a gift from heaven.
For Europe, amid an existential crisis over its energy model, the question is simple: can it move from one dependency to another, from Russian gas to American LNG?
Military industry: Arms dealers are rubbing their hands
Each conflict has its weapon. The Spitfire of the Second World War, and the B52 of the Vietnam War. In Ukraine, it is not the planes that have made the difference and explain the retreat of the Russian army since the beginning of September. But Himars, GPS-guided missiles that can hit targets located dozens of kilometers away with an accuracy of a few centimeters.
And Javelin, missile launchers with a range of 2,500 meters, capable of piercing the armor of any tank. In the Ukrainian plains, they made a hit. Their particularity? Both are manufactured by the American giant Lockheed Martin, the largest arms manufacturer in the world. An undeniable strategic success for the American war machine.
With Lockheed Martin, Raytheon Technologies, Boeing, Northrop Grumman, and General Dynamics, the United States already occupies the first five places in the world ranking of the largest arms manufacturers, with a turnover of nearly 183 billion dollars and an export market share of nearly 40%, according to the latest figures from Sipri, a Swedish think tank.
“The arsenal of democracy” as President Franklin D. Roosevelt called it, is firing on all cylinders. The war in Ukraine has created a huge surge in demand because the equipment sent has been drawn from stocks that the American army will have to replenish. Added to this are the “off-the-shelf” purchases made by a host of states wishing to equip themselves as quickly as possible.
Finally, in an almost Pavlovian reflex to offer themselves the protection of the American big brother, most European countries have placed orders. First and foremost Germany, which has announced its desire to buy up to 35 F-35 fighter jets from Lockheed Martin. The Royal Navy will invest $300 million to increase the capabilities of its Tomahawk missiles. The Netherlands has put $1 billion on the table for Patriot medium-range missile defense systems. Estonia ordered six Himars systems and a ballistic missile capable of reaching a target nearly 300 kilometers away this summer. As for Bulgaria, it decided in September 2022 to further increase its order for F16 fighter jets for an amount of 1.3 billion dollars...
“As a result, the U.S. military industry is now facing considerable production constraints,” said Josh Kirshner, director of Beacon Global Strategies. Recently, Kathleen Hicks, the Deputy Secretary of Defense, gathered the heads of these American behemoths to urge them to accelerate their investments to prepare for a potential conflict with China in Taiwan.
With his finger on the pulse, Lockheed Martin CEO Jim Taiclet announced that the company would be able to produce 96 Himars per year, up from 60. One more step towards a war economy.
Grains: soon American corn on the plates of Europeans
When Europe's granary goes up in flames, the farmers of the American Midwest are rubbing their hands. In particular corn producers, are by far the biggest exporters on the planet ahead of their Argentinean, Brazilian and Ukrainian competitors.
The war in Ukraine has upset all agricultural balances.
Africa and the Maghreb were the first victims. But the Old Continent has also been affected. Over the past decade, Europe has been in the hands of Ukraine for its corn supply. Nearly a quarter of the corn consumed on the European continent is grown outside the borders of the European Union, particularly in Ukraine, which has become Europe's leading supplier over the years.
While the fighting has disrupted planting, the country's production could be cut by 10 to 15 million tons this year. Even if a large part of the deliveries have been able to leave Ukraine, the European buyers have not been able to find enough and have had to knock on the doors of other suppliers.
The United States has a very large corn production capacity. This strength has not only enabled them to serve their domestic market, but also to take over from Russia and Ukraine and export widely to other countries. And in particular to Europe. The problem is that most of the American ears of corn are GMO. What to revive the controversies on animal feed.
Industrial competitiveness: a relocation magnet
Martin Brudermüller, the CEO of BASF, is not one to use threats lightly. For weeks now, the boss of the global chemical giant, Germany's largest energy consumer, has been sounding the alarm. With the energy crisis sweeping Europe, whole sectors of its business are simply no longer profitable. Nor competitive.
Its energy bill has tripled in the first nine months of the year compared to the same period in 2021 and is nine times higher than two years ago. With the result plunging nearly 30% year-on-year in the third quarter of 2022. An impossible equation.
Without a qualm, the boss has warned: he could relocate a significant part of his business to more clement climes. That is, where energy is cheaper. For decades, the price of labor has shaped the map of globalization.
Now, in many industrial sectors, such as steel, glass, fertilizers, and chemicals, gas and electricity prices are under the microscope. With this perspective, America is an Eldorado. Thanks to shale gas, the United States has an extremely large potential for low-cost production, with prices that are permanently two to three times lower than in Europe.
And when it comes to seducing beleaguered European industrialists, Uncle Sam knows what to do. Recently, the governor of Oklahoma wrote a full-page article in the German business daily Handelsblatt promoting his region, listing its advantages: wages almost 40% lower than in California and unbeatable energy costs. Sixty German companies, including Lufthansa and Siemens, are ready to invest in this southern state. So many investments that they may not make in Europe.
For many economists, we are on the verge of a new wave of massive deindustrialization in Europe.
Especially since Joe Biden played a trump card this summer: the Inflation Reduction Act (IRA), a vast plan to limit the inflationary shock and accelerate the decarbonization of the economy with large subsidies to finance green industrial investments. This is a “declaration of war” in the eyes of the European metalworking industries. The IRA provides for a $7,500 subsidy for the purchase of an electric vehicle, provided that it is assembled in the United States and that the battery contains 40% locally mined minerals. For European manufacturers, this is a very strong risk of distortion of competition and an incentive to invest in the United States. European leaders have been warned.
Some reading
America Will Be the Dominant Power Before China in the Next Thirty Years. Here Is Why. The only pitfall that could prevent this American domination is the political instability into which the country could fall.
British Military-Linked Institute Reveals Vladimir Putin’s Original Plan in Ukraine. This report also details the 4 main reasons why Putin’s Blitzkrieg plan has failed in Ukraine.
The Geographic South Has Given Way to a Global South Encompassing China, Africa, and Russia That Opposes the West. The torch of contemporary imperialism has largely been passed from West to East (Russia, China).
Republicans Are Now Looking for a Trumpism Without Donald Trump. Ron DeSantis is emerging as an increasingly serious alternative to Trump for 2024.
The War in Ukraine Puts America Back As the World’s Leading Superpower. This return of the “American moment” to the forefront of the international scene was not at all obvious after the presidency of Donald Trump.
I doubt that Joe Biden is truly the engineer of all you recount, nonetheless I believe your conclusions regarding the near term outcomes are sound and serious food for thought for those who might be repelled by the notion that an administration so divisive could at the same time produce such outcomes.