Week signals: A reverse-reverse Nixon theory
Plus: watch points for Ukraine, Russia, Belize, Greenland, Canada, and South Korea.
This week:
IN REVIEW. Occam's razor versus Trumpology, carrots versus sticks, and Nixon '72 versus Thatcher '84.
UP AHEAD. A meeting in Riyadh, fighting in Syria, crunch time in Congress, a new leader in Ottawa, and an old one in Seoul.
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The Week in Review: Why Trump is kowtowing to Putin
The week began with the aftermath of the excoriation of Volodymyr Zelensky. It ended with the aftermath of the on-and-off tariffs in North America. In between, tensions revived in the Balkans, instability erupted in Syria, Russia meddled in Myanmar, debt brakes were lifted in Germany, and new threats and back channels emerged in Gaza.
The connecting thread, of course, was the White House’s upending of the rules-based order. This project was celebrated in occasionally surreal tones during President Trump’s congressional address on Tuesday. And while it may have hit something of a speed bump from the courts and the markets, the dealmaker-in-chief continues to pursue a fast and furious agenda. So what is driving him?
Occam’s razor would say the motivations come down to Trump’s personal style and personal incentives. Aged 78 and in his second term, the president is in a hurry. With a budget due in a week and midterms in a year, he has limited time to implement his agenda, thus must do so quickly, and by decree. And with a fractious coalition of MAGA, Silicon Valley and mainstream Republicans – some of whom are already fraying over DOGE and H-1B visas – he has limited political space. Crash or crash through.
But imagining there’s more method to the madness, what else could explain Trump’s moves?
One theory doing the rounds, for his tariffs at least, is that everything’s a build-up to a “Mar-a-Lago Accord”, whereby the major economies will sit down, like they did at the Plaza Hotel in 1985, to depreciate the dollar and correct the US’s trade imbalance with its main trading partners.
There are several problems with this theory. Least of all, as investor Ray Dalio has pointed out, is that most currencies, not just the USD, have a valuation problem, thanks in part to the post-Covid years of suppressed rates and fiscal stimulus. The other problem, as we see it, is that new means of exchange, like Bitcoin and a putative BRICS-enabled payments system, would make such a gambit too risky. And besides, while a weak(er) dollar may help US manufacturers, it could crush US consumers, already battling with the price of eggs and rising unemployment.
On the strategic side of the equation, Occam’s razor would suggest Trump is simply getting out of Ukraine to save money and avoid further entanglement. Yet why do that while also pursuing entanglements in Gaza? A grander unified Trump theory is that he’s using chaos to bring about a new multipolar order on American terms – a new Yalta Agreement – whereby spheres of influence can be reestablished so as to avoid (as Trump keeps saying) World War III. This, as with the Mar-a-Lago Accord conjecture, involves moving fast and breaking things. Better to get deals done quickly, and confuse the “war hawks” of Europe and of the Deep State, than find it buried in the swamp.
A variation of this theory is that Trump is pursuing a “reverse Nixon”, whereby Russia (and possibly Iran) can be peeled away from China, as Richard Nixon tried to do with Mao’s China against the USSR in 1972. This, the theory goes, would reduce the risks of war in Europe so as to “pivot” to Asia. But like a Mar-a-Lago Accord, there are problems with this theory too. In 2025, China and Russia are close. In 1972, they were in a state of hostility. For Nixon, China was an unrealised power, for whom diplomatic relations didn’t yet exist. For Trump, Russia is a bugbear (“history’s greatest witch hunt”). And even for most Republicans, Putin is a bogeyman.
But peace is still being pursued, and on seemingly over-generous terms for Moscow, despite potentially hollow threats of more sanctions. And Trump’s approach contradicts a cardinal Art of the Deal dictum (i.e., "Use your leverage - the worst thing you can possibly do in a deal is seem desperate to make it.") So, what explains this? Here, we come up with a third theory: that the US isn’t making nice with Russia to make war with China, but to make peace with China instead.