FOCUS magazine: This is how war becomes US business

12:13 30.01.2023 •

Pic.: FOCUS

Former President Calvin Coolidge's sentence has been applicable for centuries: "After all, the main business of the American people is business."

The United States supports Ukraine like no other country in the world. But this help is not entirely disinterested. Because even Joe Biden has nothing to give away, notes Gabor Steingart, one of the most famous German journalists in his article at FOCUS magazine.

The President of the United States is betting on "armament on credit." Germany, on the other hand, can only hope that the war will soon end not far from its front door. Since the beginning of the war, the United States has provided more than $50 billion in military, financial and humanitarian aid to Ukraine. Much more than in any other country.

In May 2022, the Senate passed a law allowing the US government to quickly and without bureaucratic delays provide military equipment to Ukraine – the Lend-Lease Act for the Defense of Democracy in Ukraine of 2022. Approximately US$23 billion in military support has not been wasted. It states that "any defense loan or lease to the Government of Ukraine is subject to return, reimbursement and repayment."

Arms on credit, which is what it is, was invented during World War II when Winston Churchill found he could not defend Britain alone. The government has now remembered the procedure for selling weapons against bills. The fact is that the United States is strict in these matters. Britain delayed its Lend-Lease contributions until 2006, when the World War was already 61 years old.

An analysis by Foreign Policy magazine found that the United States nearly doubled the number of approved arms sales to NATO allies in 2022 compared to 2021, from $15.5 billion to $28 billion. This is how war becomes business.

Economic sanctions—trade restrictions, asset freezes, payment system bans, or oil export bans—have isolated Russia. This will irrevocably disrupt the old German-Russian trade for a very long time. American energy companies offer themselves as helpers in an emergency.

LNG imports from America doubled in 2022. U.S. oil is also suddenly in demand, with about 500 U.S. oil tankers heading to Europe since February 2022, according to data provider ‘OilX’, and helped push U.S. crude oil exports to a record high last year. Between December 2021 and December 2022, US exports increased by 52 percent.

In the medium term, the concentration of uncertainty in Europe will also benefit the US capital market, which is perceived by investors as a safe haven. The outflow of capital from Europe in the first months of the war was significant.

BASF reported a loss of billions of dollars, which was mainly caused by the write-down of the Russian business, which has since ceased.

The Europeans, and Germany in particular, have a primary strategic interest in ending the conflict as soon as possible, or at least freezing it, and in no case in the direction of the Western European metropolises.

The stronger and more intense the war rages in Europe, the more pessimistic are investment conditions both in the real economy and in the capital markets in London, Paris and Frankfurt.

Conclusion: Trading partner Russia is de facto exchanged for trading partner America. Thus, the Americans are also strengthening their negotiating position for negotiations on future free trade agreements and a strategy for China.

If there were a planning headquarters in the Ministry of Defense, then it would write down the following paradox for the minister in the summary: Russia is at war with Ukraine – and America is winning.

 

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