On Ukraine, Anna Rosenberg, head of geopolitics, Amundi Investment Institute, said in an interview on 9 December 2024: “Firstly, [Trump] is well-known to dislike wars and bloodshed. Secondly, he sees that this war is currently pointless as it’s not a winnable war and wants to end it.”
No base case but three scenarios
Active asset management is about taking positions. “I’m refusing to make a base case yet on the success of such… very, very difficult talks… we do [not] have enough information to make a call on the success of such talks.” She thinks that the consensus is that there will be an agreement, but it is “way too optimistic at this point.”
Yet Rosenberg provided three scenarios. Upon a ceasefire accepted by Russia and Ukraine, Rosenberg expects economic benefits for Russia through the lifting of sanctions on financial assets and travel, for instance. As for Ukraine, it would agree on “some kind of reconstruction promises… bilateral security guarantees from a few European countries… and some promises of accelerated EU accession.” She did not provide an expected timeline.
The second scenario is one in which Russia declines a ceasefire and the US “doubles down” on support for Ukraine and “then you could get a Nato escalation.”
Last time around, tariffs were primarily an economic tool
In the third scenario, Ukraine declines the ceasefire while Russia accepts. In such an outcome, she thinks that the Americans would push back the responsibility to Europe which would have “to deal with this mess.” She believes it would be a very divisive outcome amongst European countries with Russia making some additional gains.
What relation is more important for Russia?
As a condition for ceasefire in Ukraine, Rosenberg thinks that Russia would probably be required to reduce its relation China, Iran and North Korea. She is therefore sceptical of such an outcome as she believes that Putin prefers to align with longer lasting regimes, such as China and North Korea, rather than relying on Trump who will remain in power for only four years.
Tariffs: a geopolitical or an economical tool?
“Last time around, tariffs were primarily an economic tool.” She thinks that it may be different this time as countries will have “to choose sides,” making the tariffs more complicated to implement.
Rosenberg observed that middle powers around the world managed to “flirt with many different sides at the same time” without consequences. The expansion of the , a forum for cooperation amongst a group of emerging economies, is an example of such a trend in the recent years despite many of its member-countries displaying opposite political goals. She thinks that Trump will force these countries to take sides by using tariffs.
Yet applying them may not be as simple as it sounds. Indeed, the US administration will be confronted with competing priorities of managing trade balance objectives with foreign policy goals whereby a coordination of the various US departments is necessary (treasury, commerce, etc.).
60% tariffs: “a propaganda tool” to apply on irrelevant sectors
The second aim is to improve the trade balance with China. She thinks that tariffs of 60% across the board and the removal of China’s most favoured trade nation status are unlikely as they will implausibly get through Congress given their potential impact on inflation and the US economy.
Rather, a Trump administration is expected to initially target the sectors already affected under the with further increases between 10% to 30% to be implemented gradually. Further trade investigations are expected with additional sector likely to be targeted, “a gradual process.”
Repatriation of manufacturing may be the ultimate goal
After having read the book of Trump’s close advisors Robert Lighthizer and Peter Navarro, Rosenberg thinks that Trump’s policy on China may strategically decouple in a greater number of sectors. Whereas Biden focused on AI, quantum and computing semiconductors where domestic manufacturing is favoured, she believes that the president-elect will add the “Hamiltonian sectors” that includes “small computers, laptop things, smaller technology items” by bringing them back on US soil.
Started under the Inflation Reduction Act, she thinks that Trump will continue the push to attract “the best business in the world” with Europeans relocating in the US instead of risking losing sale opportunities.
Chinese retaliations
Rosenberg thinks that China will initially lessen the impact of tariffs by providing more stimulus, limit exports of rare earths or some inputs for the pharmaceutical sector and may also consider devaluing its currency. Therefore, Trump’s policies could backfire against US interests.
Should China feels economically cornered, Rosenberg warned that geopolitical risks may arise through an increase willingness by China to take risks on the Ukraine-Russia conflict or in the South China sea, for instance.
European targets with new or the resumption of tariffs
Despite counting some foreign policy realists in its ranks such as and , who may understand the interest of counting Europe on its side, Rosenberg thinks that the Trump administration will nevertheless targets Germany (car sector), Ireland (tax laws), France and Italy (luxury products) and Airbus as a representative of European industrial policies.