Duties and gas transit issues for Ukraine: Trump's policy more beneficial than Biden's?

Author : Oleksiy Kushch

Source : 112 Ukraine

"Hybrid patriots" and "fake nationalists," who have been waiting for Biden's coming to power, will soon face the fact that Europe to impose duties on our goods with a "carbon footprint," primarily on metals
23:24, 1 February 2021


Donald Trump wanted to revive America's former glory, by which he understood Detroit's industrial greatness. By the way, that Detroit, which is now experiencing an acute urban crisis, when the population was reduced by almost half, and in 2013 the city declared a default. For the sake of restoring the industrial core of the national economy, Trump was ready to declare trade wars on almost the entire world and even withdraw from the Paris climate agreement.

In the 21st century, to save the financial bubble, they will print money for the allometric growth. Allometric growth is the growth of an organ, which occurs at a different rate than the growth of the whole organism. The change in size is accompanied by a violation of the original proportions. The growth rates of the capitalization of financial markets and, consequently, of the incomes of the owners of financial assets exponentially outstrip the growth of labor productivity and, accordingly, the labor income of the bulk of the population.

With such dynamics, by the middle of the century, a narrow stratum of "capitalocracy" will increase the share of its assets to 90% of national income, completely replacing the mechanisms of direct democracy in the form of elections with a farce and a systemic simulacrum, when simulative reality replaces actual reality. Society will be controlled using the methods of the "digital concentration camp," when dissidents will not need to be physically executed, a "digital execution" will be enough: the cancellation of social insurance, the system of points for moral purity, removal from social networks.

Related: Biden considers new candidate for post of U.S. Ambassador to Ukraine, - MFA

Such physical life will be similar to the physiological state of "bodies in a matrix." Digital execution will become more effective than physical restriction of freedom. To complete the formation of the global matrix, a total defeat of the republican elites in the United States was required. The closest blurring of distinctions by class, gender, and the race will finally form a jelly-like society, with no internal structuring, incapable of active opposition. And the cherry on top is the new hegemon of the superstructure, but it will not be the proletariat, but the "capitalocracy" that controls most of the financial markets. The defeat of the Republicans for the next two political cycles will maximize this.

All random allies and their interests will be sacrificed, and enemies, if it is profitable, will even receive some economic bonuses for a while.

There is in the eastern military strategy such a technique as the maximum intimidation of the enemy, for example, by beheading prisoners in full view of the enemy troops. One of Biden's first decisions was to decapitate... an ally – Canada. The Russians, Venezuelans, and Saudis should be horrified. The Americans have not yet been able to stop Nord Stream 2, but have already stopped the construction of the American-Canadian Keystone XL pipeline from Alberta (Canada) to Texas (USA), which was supposed to carry Canadian oil for processing at American oil refineries.

A few years ago, this project became the compensation that Trump offered Trudeau in exchange for Canada's concessions on the new format of the North American trade partnership. Canadian oil supplies were exempted from import duties. For Canada, this was the infrastructure project of the century. The Canadians believed the Americans, and so much so that the largest bank, Royal Bank of Canada, financed the project, and the province of Alberta itself spent $ 1.5 billion from its budget and provided $ 6 billion in government guarantees. Now this project is frozen.

Biden's next step is a ban on shale oil production in the United States. On the one hand, all these decisions are part of Biden's program to decarbonize the economy. On the other hand, they are really directed against Texas companies, Trump sponsors, and Republicans. Now Canada is considering sanctions against the United States. Billions of dollars are wasted. Moreover, Biden called Trudeau only a few days after the signed decree.

Related: YouTube extends suspension of Trump’s channel indefinitely

We predicted that under the Biden administration, the United States would gradually curtail the shale industry, depriving it of government support, simultaneously reincarnating American energy interests in the Middle East and Venezuela, turning again from a net exporter to a net importer of oil. Now, these predictions are gradually coming true. And the conflict between Washington and Ottawa is only an episode – the Canadians will understand the situation.

One of the areas of work of the new administration in Washington will be the so-called "green course," which has already been activated in Europe. It will be implemented at the expense of developing countries, which will be limited to growth in the form of special duties on the "carbon footprint" in their products. If necessary, they will "decapitate" not only the third world countries but even their closest allies, as they did with the Canadians. Why does the "capitalocracy" need trillions of their dollars, if all this will be covered with a copper basin of an ecological crisis: why are billions needed if "everything melts."

Here we can also recall the concept of the future, formulated by Schwab in the article "A Very Big Reset," published last summer. It focused on the systemic breakdown of clichéd neoliberal discourse around the world, from the US to Indonesia. About the same, only from different positions, the Nobel laureate Joseph Stiglitz said when predicting either "the beginning of history" or the death of civilization due to growing environmental problems: "... Neoliberalism literally brings the death of our civilization ... The only way forward, the only way to save our planet and our civilization - to give new birth to history. We must revive the spirit of the Enlightenment and again commit ourselves to honor its values ​​of freedom, respect for knowledge, and democracy."

No one doubts that humanity has come close to the point of no return, after which the ecological crisis will become a self-sufficient factor in the weakening of our civilization. The key problem is programmed by a simple mathematical relationship: resource consumption, population growth, and environmental pollution are exponential, while technologies that promote more efficient use of resources and reduce ecosystem pollution are developing linearly. Hence the simple conclusion: the gap between the level of consumption and the ability to save resources will grow exponentially every year.

Related: New criminal proceedings opened against Poroshenko, Biden in Ukraine, - lawyer

When we talk about a direct threat to the neoliberal model of development in the context of the future of human civilization, we mean its basic setting in the form of an operating market mechanism. On the one hand, there is rational consumer choice, which is an axiom of behavioral economics. Economic agents will buy cheaper consumer goods with comparable quality (excluding status and brand goods). That is, choosing between different lots of metal of the same quality, the buyer will buy the one that is cheaper, and not the one that is more expensive, but produced using "green technologies."

As for the manufacturers, the principle of profit maximization rules here, and no one will force a car manufacturer to produce models with a service life of 40 years, if in order to increase production profitability and keep the market, the model range needs to be updated every year. As the "godfather" of neoliberalism, Milton Friedman, said, defending the principle of paid education: Society doesn’t have goals, people have goals. Based on this postulate, the world has been developing for the last half-century. Yes, this has led to an unprecedented rise in living standards in a number of countries, but in parallel to a similar unprecedented over-expenditure of natural resources and an increase in the anthropogenic load on the planet, which has increased to a critical level. It's time to pay the bills.

Center for Global Analytics, BCG conducted a study: "How an EU Carbon Border Tax Could Jolt World Trade. According to them: "... an EU import tax of $ 30 per metric ton of CO2 emissions (one of the possible scenarios) could reduce the profit margins of foreign producers by about 20% if the price of crude oil remains in the range of $ 30-40 per barrel.

The tax can reduce profits from the sale of imported flat products, in particular, by about 40% on average. The impact of additional costs will be felt deep into the process chain. In some sectors, a border carbon tax may change the conditions of competitive advantage. And European producers will "suddenly" find that the cost of Chinese or Ukrainian steel produced in blast furnaces is now less profitable compared to the cost of the same type of steel from countries that, for example, use more carbon-saving technologies."

"Hybrid patriots" and "fake nationalists," who have been waiting for Biden's coming to power, will soon face the fact that Europe to impose duties on our goods with a "carbon footprint," primarily on metals. Europe does not want Ukraine to "make smoke." Our industry must be finally "decommunized." Together with nuclear energy, which, although it does not smoke, confuses everyone with its cheap electricity, especially the green lobbyists.

Related: Zelensky admits he is "little bit angry" with Trump

The fact that at the same time the Ukrainians will have to increase the electricity tariff by about five times is of no particular interest to anyone. The collapsing economy, shrinking like a dying star under the influence of its gravity, can no longer provide the efficiency of either the existing energy sector or the infrastructure in the form of railways. All this was created for completely different macroeconomic parameters (population, GDP). We have already been assigned an inheritance in the form of a cornfield because the EU wants to abandon the cultivation of industrial crops such as rapeseed, soybeans, sunflower, and corn. They are harmful to the soil, depleting it, and the use of herbicides causes the growth of oncological diseases among the population and harms animal biological diversity.

For the "green course" in the short term, relatively expensive oil is needed so that there is no relapse in the phasing out of alternative technologies, as was the case in 2020 against the backdrop of falling oil prices when alternative fuels became uncompetitive in terms of conventional oil equivalent. This means that the United States will reduce oil production and will not allow Canadians to process it, resuming its imports from far abroad. And in the short term, the Saudis and Russians will benefit from this, as they can generate additional income and try to diversify their economies. That is why the Canadian oil pipeline was blocked, and Nord Stream 2 is likely to be completed.

Trump has long been considered a pro-Russian president, although his actions delayed the construction of Nord Stream 2 as much as possible and deprived Russians of a part of the European market, where American shale gas came in the form of LNG. Under Trump, the toughest sanctions package was introduced. Under him, the price of oil fell below $ 50 a barrel, and the Russian economy missed tens of billions of dollars, partially losing its potential for modernization and rearmament.

Related: Biden to present his foreign policy course on February 1

And countries such as Ukraine should assess their allies by the level of trade duties on their goods and the dynamics of gas transit, which brought us up to three billion dollars a year, or 1.5-3% of GDP.

After the peak of transit in 2017 at the level of 93.5 billion cubic meters, we got an almost twofold drop to 55.8 billion cubic meters. last year and a corresponding reduction in transit fees. And in 2021, we may even find ourselves at the minimum break-even point for the maintenance of the gas transportation system, when transit will be reduced to a critical 40 billion cubic meters annually. We also have our own markers of the effectiveness of allies in the context of national economic interests. We alone exchange them for several hundred million dollars of technical assistance a year and loans that need to be repaid. With natural consequences for the economy as a whole.

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