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Press review: US prepares for space battles and Russia to side with China in trade war

Top stories in the Russian press on Wednesday, June 20


Nezavisimaya Gazeta: Trump gearing up for "Star Wars" with Russia, China

US President Donald Trump has announced he is directing the Pentagon to establish a new space force as an independent service branch to ensure American supremacy in space. He described space as a national security issue saying he does not want "China and Russia and other countries leading us."

US officials have pointed to China’s and Russia’s dominance in outer space and related military threats on numerous occasions emphasizing that Russia and China are developing weapons aimed specifically against US military targets in outer space, Nezavisimaya Gazeta writes.

According to Lt. Col. Vladimir Evseev, Deputy Director of the Institute of the CIS (the Commonwealth of Independent States), Washington’s plans to create a space force stem from Trump’s desire to lead the world. "It is evident that the arms race will be taken to outer space, with weapons, space vehicles capable of countering or, rather, destroying Russian or Chinese intercontinental ballistic missiles, military satellites and so on deployed there," the expert stressed. "If that happens, Russia will have to retaliate doing that jointly with China. That will be effective and not be too costly. Moscow and Beijing have stated they are strongly opposed to creating space weapons. China has already learned to destroy low Earth orbit satellites. Russia likewise has the means of countering and destroying space vehicles. That’s why these threats to China and Russia related to establishing the US space force will be neutralized sooner or later."

Meanwhile, Maj. Gen (Ret.) Vladimir Dvorkin, a Chief Researcher at the Russian Academy of Sciences’ Institute of World Economy and International Relations told the paper it is difficult to foretell at the moment what negative consequences Trump’s space force initiative will have for Russia. He explained that "it is necessary to know the US Space Force structure and the missions it is going to accomplish." The Americans have not provided any details yet and "are at the initial stage of that process," the expert stressed.


Kommersant: Russia to side with Europe, China in global trade war

Russia has decided to take part in the global trade war, which is gradually gaining momentum. Taking cue from China and the European Union, Russia will raise tariffs on imported US good in response to Washington’s protective measures concerning steel and aluminum supplies, Economic Development Minister Maxim Oreshkin said. The tariff row is unlikely to fade away until the elections to the US Congress scheduled for November, Kommersant writes.

Other countries have announced tit-for-tat measures as well. China filed a WTO complaint and increased duties on US imports worth $3bln. The EU, Canada and Mexico published their own lists of increased tariffs after Washington extended its steel and aluminum duties to them on June 1.

"According to WTO rules, the countries affected by unjustified trade restrictions have the right to take tit-for-tat measures without waiting for the results of considering their WTO complaints," the paper quotes Sergei Afontsev, Head of the Economic Theory Department at the Institute of World Economy and International Relations, as saying. "Concerning US steel and aluminum tariffs, that’s what India did a few days ago, the relevant EU’s decision is expected. Russia follows the global trend."

If the US is willing to begin a dialogue, the parties could discuss the mutual damage, but this estimate can take two or three years, he pointed out.

The trade war between the US and China is a very real threat, the expert went on to say. "To date, both parties seem to be willing to raise the stakes by increasing duties and extending them to new groups of goods. Where the limits of such escalation are and whether they exist at all is a big question," Afontsev stressed, adding that this is a fundamentally new situation in global trade.


Izvestia: Business climate in Russia improving despite US restrictive measures

The expansion of anti-Russian sanctions imposed by Washington in April has not had any substantial impact on the economic activity in the country. As many as 70% of Russian companies have felt no effects whatsoever from the fresh restrictive measures. Entrepreneurs also say the business climate in Russia has improved over the past few months, Izvestia writes citing a report by Russia’s Central Bank.

At the same time, the situation in the financial markets is expected to remain stable, while the risks of a worst case scenario are estimated as low, the Central Bank said.

The business climate in Russia can be described as neutral, says Georgy Ostapkovich, Director of the Center for Business Tendencies Studies at the Higher School of Economics. To change it, it is necessary to pass the relevant laws aimed at improving conditions for doing business. For most Russian businesses, sanctions have indeed gone unnoticed. However, they have affected the biggest systemically important companies, the expert stated.

The Russal aluminum company has been most affected by Washington’s restrictive measures, with its stocks falling to a historic low. The Russian government is eyeing measures to protect the businesses affected by sanctions. The proposed moves include the creation of two offshore zones in Russia’s western exclave of Kaliningrad and the Far East, where companies could be registered and pay taxes on special terms.


Kommersant: US seeks to derail major Russian-Indian defense contracts

Washington and New Delhi are completing preparations for the first ever two-plus-two meeting between the US and Indian defense and foreign ministers. Washington dissatisfied with the defense cooperation between Moscow has warned that the purchase of Russian-made arms by India could result in sanctions imposed on that country. Considering that Russia continues to be India’s key military-technical partner, the US pressure is becoming a critical litmus test for relations between Moscow and New Delhi, Kommersant writes.

"It’s highly likely that the US administration does not want to spoil relations with India, especially taking into account the fact that relations between the two countries are currently on the rise. However, far from everything depends on the White House team and President Trump personally," Ruslan Pukhov, Director of the Center for Analysis of Strategic and Technologies, told the paper. "There is also the Congress and such laws as the ‘Countering America's Adversaries Through Sanctions Act’ (CAATSA). That law, which took effect in January, can be used to punish those foreign companies, which continue defense cooperation with Russia, Iran and North Korea."

In India’s case, the potential for using US sanctions is very limited, considering its dependence on Russia in upgrading the weapons it purchased earlier and the policy aimed at maintaining strategic autonomy, Vasily Kashin, Senior Research Fellow at the Russian Academy of Sciences’ Institute for Far Eastern Studies, explained to Kommersant. "Besides, India understand that its military-technical cooperation with Russia plays the role of a constraining factor with regard to cooperation between Russia and Pakistan," he said.

For its part, a source in the Russian military-industrial complex told the paper that, despite the US pressure, Moscow is confident in its Indian partner. At the latest unofficial meeting on the S-400 systems, India said the issue had been resolved. "The Indians could hardly do otherwise," the source noted. "China has the S-400 systems, so the Patriots will not do for New Delhi, since the US systems are much weaker."


Nezavisimaya Gazeta: Glimmer of hope for Korean reunification

North Korean leader Kim Jong-un is paying a visit to Beijing. The negotiations are being held amid the US-China trade row, which could grow into a full-fledged trade war. According to the New York Times, that will make it possible for Kim to take advantage of disagreements between the two powers and counteract US pressure.

Although Beijing backed UN sanctions against North Korea, it made clear recently that China wants to render economic assistance to Pyongyang. However, Beijing’s liberal attitude towards its neighbor ends as soon as the Korean reunification issue is brought up, Nezavisimaya Gazeta writes.

The Republic of Korea’s Constitution states it is the president’s duty to promote the country’s reunification, while North Korea’s founding father Kim Il-sung put forward a concept of the proposed state called the Democratic Confederal Republic of Koryo back in 1980, Konstantin Asmolov, a Leading Researcher at the Institute for Far Eastern Studies at the Russian Academy of Sciences, recalled in an interview with the paper.

"However, the chances of implementing such ideas are as vague as before the inter-Korean summits. Although both sides are talking about the reunification, they interpret it in a different way. South Korea means the elimination of the North and the formation of an even bigger Republic of Korea to embrace the entire Korean Peninsula. However, for the North the regime change would affect practically the entire middle class, in addition to the political establishment - the military, engineers, doctors, teachers and entrepreneurs, who will be unable to compete with the similar social strata in the South," the expert explained, adding that the reunification is impossible in the short-term perspective.


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