• Our Favorite ETF Ideas: Get 30-Days Free

    Get 1-month of completely free access to “ETF Pro Plus” – our Macro team’s monthly strategy note distilling our macro investment research down to our favorite ETF exposures.

Editor's Note: Below is a complimentary research note written by National Security analyst LTG Dan Christman. To access our Macro Policy research please email sales@hedgeye.com.

Putin & Biden | High Noon in Geneva? - 6 7 2021 11 42 32 AM 

In ten days the presidents of the U.S. and Russia travel to Switzerland for their first meeting as heads of state.

Summits in which leaders of democracies sit down with their authoritarian counterparts have built-in drama; that’s certainly the case with the forthcoming Biden-Putin summit.

This is an important meeting. It is not JFK to Vienna in 1961, or Chamberlain to Munich in 1938, where outcomes impacted decisions that risked war.

Nor will this be a summit that embarrasses America, as was the case in 2018 in Helsinki, when a U.S. President publicly sided with Putin at the expense of the entire U.S. intelligence community on the issue of Russian election interference.

But the stage-setting for this meeting, particularly in light of the deteriorated U.S.-Russian bilateral relationship, has fueled international speculation on potential deliverables.

Unlike Secretary of State Antony Blinken’s meeting in March with his Chinese counterpart, which quickly deteriorated into a verbal slugfest, Blinken’s sit-down with Russian Foreign Minister Sergei Lavrov in Reykjavik three weeks ago was workman-like.

And, at the same time, there was the intriguing decision by Biden NOT to sanction the company building the Nord Stream 2 gas pipeline, a company whose parent is Russian hydrocarbon giant Gasprom.  

So, what might be on the agenda? While a slate of potential topics easily numbers into the dozens, there are three that stand out geo-strategically and that will shape the U.S.-Russia rivalry until the end of Putin’s term in 2036:

  • Electronic warfare, including escalating Russian cyberattacks
  • Strategic gamesmanship in the Arctic
  • Ukrainian sovereignty 

First, Cyber: no bilateral issue is more important for the forthcoming summit, nor more complex.

Russia is “swinging for the fences” to delegitimize American democracy, disrupting critical infrastructure, harming U.S. diplomats with microwaves (the “Havana Syndrome”), and infiltrating government and private computer systems to steal foreign policy and IP secrets.

What might the president do, either at the summit or subsequently?

First, Biden could try for a cyber deal like President Obama cobbled together with Xi JIngping; the agreement didn’t last long, but it curtailed for a while Chinese cyber theft of commercial secrets. Or the president could try to build off a new UN report that calls for the international adoption of norms for state-sanctioned cyber activity. 

Or, if Biden gets nowhere in Geneva, he could swing for the fences himself and finally sanction the group of oligarchs in Putin’s inner circle that influences decision-making.

There’s no simple option. But Maine Senator Angus King has at least a short-term fix; he’s sponsoring the Cyber Diplomacy Act, crafted to help intensify the work with other nations in confronting the Russian government and the cyber gangs operating with Russia’s pleasure. As King said last week, “If someone’s a cybercriminal in Russia, I want them not to be able to visit Monte Carlo or Paris as well as Miami or New York!” 

Next, the Arctic: with climate change accelerating, especially in the Arctic, the northwest and northeast passages through Arctic waters have quickly acquired strategic significance.

And Russia, with 40 polar ice breakers (compared to two for the U.S.) and a northern build-up of air and ground forces, is wasting no time in trying to extend the limits of its territorial seas. In some respects it’s the Arctic analog of Beijing’s South China Sea misadventures.

The major difference? There is in place an active, eight-country forum called the Arctic Council that convenes regularly to promote cooperation; both Russia and the U.S. are members, and Russia will chair the Council for the next two years. (China of course has resisted ANY dialogue over its territorial sea claims.)

If Biden is looking for an area to advance a dialogue with Russia, the Arctic is a tempting topic that combines both climate and security.  

Finally, Ukraine: in 1994 Russia signed the Budapest Memorandum, pledging to respect the territorial integrity and political independence of Ukraine. Moscow hasn’t, of course, and will not as long as Kiev, Brussels and Washington harbor thoughts of Ukraine joining NATO.

The mammoth and threatening military exercise Russia staged on Ukraine’s borders earlier this spring was a direct warning to Kiev: don’t even think about receiving a “membership action plan” (MAP) from Brussels, or acting on it.

Biden won’t abandon Kiev; no American President could survive politically by acknowledging that Ukraine fails within a Russian sphere influence.

Similarly, no Russian leader will turn his back on Ukraine; a religious, cultural and ethnic history that dates to the 10th century will always emotionally bind Moscow and Kiev.

But the reality is that Russia maintains a military presence in the independent states of central and eastern Europe – not just Ukraine but Georgia and Moldova as well – and they aren’t leaving any time soon.

Putin has ensured that the west understands Russia’s deep interest in their “near-abroad.” Biden needs to make it equally clear to Putin that we have interests in that same region and are prepared to back those interests when they are threatened.

But, as the Atlantic Council recently headlined about possible summit developments, “Ukraine shouldn’t expect miracles!”     

Countless other topics will make the final agenda list, of course. And as we approach the June 16th summit date, despite the distractions of continuing Russian cyberattacks, it’s becoming clearer that this can be a pivotal meeting for the U.S. President.

Ian Bremmer, president of the Eurasia Group, recently penned that Biden’s team is “not looking for a fight, given more substantive China discord.”

The growing Russia-China strategic alignment will frame the major issues in Geneva. To be clear, Biden will not succeed in disrupting the Russia-China embrace with this forthcoming meeting – or with any follow-on sessions he may have with Putin.

But if Biden can use the Geneva summit to reduce tensions and secure even tentative understandings on how to approach strategic arms control or sovereignty in the Arctic, for example, Biden can avoid the worst possible outcome: driving Moscow into an across-the-board strategic partnership with Beijing.

Given the disastrous outcomes of some earlier U.S.-Russia summits - truly “High Noon” events – this would at least qualify as modest success.

*  *  *


LTG Dan Christman, USA, Ret. serves as Hedgeye Potomac Research’s Senior National Security Analyst, providing deep insight into international affairs and national security. Most recently, Dan provided strategic leadership on international issues affecting the business community for organizations such as the US Chamber of Commerce. Dan’s long history of leadership includes his service as a United States Army lieutenant general and former Superintendent of the United States Military Academy. He served in highly visible and strategically important positions and four times was awarded the Defense Distinguished Service Medal, the nation's highest peacetime service award.

He also served for two years as assistant to the chairman of the Joint Chiefs of Staff, during which time he traveled with and advised Secretary of State Warren Christopher. He was centrally involved during this period with negotiations between Israel and Syria as a member of the Secretary's Middle East Peace Team. Further, Christman represented the United States as a member of NATO's Military Committee in Brussels, Belgium.

Graduating first in his class from West Point, Christman also received MPA and MSE degrees in public affairs and civil engineering from Princeton University and graduated with honors from The George Washington University Law School. He is a decorated combat veteran of Southeast Asia, where he commanded a company in the 101st Airborne Division in 1969.