TRUMP AMBUSHES ZELENSKYY, BUT WILL HIS NEW POLICY WORK?
February saw American policy on the war in Ukraine turned “upside down” as President Trump sought to satisfy election promises to end the war in Ukraine promptly.
The month began with the President speaking with both Russian President Vladmir Putin and with Ukrainian President Volodymyr Zelenskyy. Zelenskyy said Trump’s proposal of direct, in-person talks—with no mention they would include Ukraine or European allies—was a sharp U.S. shift on a Ukrainian war effort that Washington has backed with tens of billions of dollars. He said there should be no concessions made to Putin.
It ended on February 28 with a White House meeting in which both President Donald Trump and Vice President JD Vance turned on Zelenskyy during a remarkably tense exchange in the Oval Office, accusing him of failing to express sufficient gratitude for U.S. involvement and overplaying what they said was a weak diplomatic hand. According to Politico, the fireworks started more than 40 minutes into what had been a cordial conversation about the economic agreement on minerals the two countries planned to sign at their press conference later in the afternoon, which included vague assurances from Trump about the U.S. standing with Ukraine if and when its war with Russia ends.
The Vice President, who’d been sitting quietly, took issue with the Ukrainian president’s criticism of Russian President Vladimir Putin, who Zelenskyy referred to as a “terrorist” known for breaking his word as he pleaded for American military backing before a phalanx of TV cameras and journalists. Vance told him it was “disrespectful” for him to come into the Oval Office,
“…. litigating in front of the American media.” Vance told Zelenskyy that, “Right now, you guys are going around and forcing conscripts to the front lines because you have manpower problems; you should be thanking the president for trying to bring an end to this conflict.” The President, who had earlier lauded Ukraine’s courage throughout the war and left the door open to the U.S. providing security guarantees, grew more animated as Zelenskyy tangled with Vance, who dismissed his invitation to come see the war in person as a “propaganda tour” aimed at maintaining the West’s financial support.
In the end, the White House asked Zelenskyy and his party to leave the White House. The lunch, press conference and – most importantly – the economic agreement which was designed to tie the U.S. and Ukraine together for years to come – was not signed.
The preceding month had already seen near panic visits to the White House by the leaders of France and the UK, and a call by the new German Chancellor Mertz, in his first press conference after his electoral win on February 23 for Europe “….to find a way to secure ‘independence’ from the American security umbrella.” The month saw the first two solely American meetings with the Russians and several hurried gatherings of EU leaders to try to find a way to salvage a unified position on Ukraine.
Comment: While the President did not end the Ukraine war on “day one” of his administration, he has certainly shaken up issue in ways few, if anyone except himself, anticipated. A retired MI6 operative, with excellent ties to intelligence services globally from his current position at St. Anthony’s College at Oxford, told SocoSIX that his major concerns with Trump’s new attitude towards Ukraine are that it appears based on two improbable, and possibly flawed outcomes:
- The first is the view among some close to the President that he can gradually schmooze the Kremlin sufficiently to create significant daylight in the currently close Sino-Russian relationship. This appears unlikely. Both Russia and China profit by not having to worry about the other as a strategic enemy. China is quietly sucking out most of Russia’s technological jewels from its currently strapped, northern neighbor through actual sharing of technology or by reverse engineering every piece of Russian military hardware it can get its hands on. For its part, Russia has seen its bilateral trade increase from $144bn in 2023 to $245bn in 2025. Even if sanctions are lifted, China will continue to be looked at more as a partner, rather than a competitor with one, principal, common enemy in the USA while Putin and Xi Jinping continue in office.
- The second improbable scenario is that Putin wants the war with Ukraine to end. Not necessarily according to this source. Putin views the West, in general, and the U.S. as Russia’s existential enemy. He sees Trump’s various international initiatives as playing directly into his long-range plans, as evidenced by President Trump’s overtly anti-Zelenskyy stance. The war has cost Russia dearly, but in the end, Putin sees a bleaker future for Zelenskyy, with significant and permanent geopolitical gains for Russia in both Ukraine and in other neighboring countries.
A somewhat more positive take on Trump’s policy comes from an experienced source at the Council on Foreign Relations (CFR). She tells us that, while it is true that the phase of U.S.-Russian relations during which Vladimir Putin was viewed as a pariah appears to have ended as a direct result of President Trump’s February 12 conversation with him. One potential high point of this new position is that it permits negotiations on various nuclear arms control agreements due to expire in less than a year to resume. End Comment.
INTERIOR SECRETARY ADDED TO NATIONAL SECURITY COUNCIL
One of the least controversial (and most widely applauded) cabinet nominees was Douglas Burgum who was confirmed as Secretary of the Interior on January 30 following a vote that saw all 53 Republicans and half of the Democratic Senators voting in this favor. Reportedly Trump’s second pick after JD Vance as his running mate, Burgum settled for three positions in the administration which, taken together, put him in the front row of Washington power brokers.
- First, the Interior Department, while not generally viewed as a ‘front tier’ ministry, nevertheless has oversight responsibility for over 500 million acres of publicly owned land.
- Second, the president has named Burgum as head of a new National Energy Dominance Council. As the two term governor of the second largest oil-producing state in the country, Burgum’s appointment is meant to execute Trump’s campaign promise to “drill baby, drill!” A source in the Senate Majority Leader’s office told us that, at his Senate confirmation hearing, Burgum framed the phrase “energy dominance” as a way to reduce, if not counter, demand for fossil fuels from countries like Russia, Iran and Venezuela. Burgum said he is not opposed to renewable energy sources in our national energy make-up, but he expressed concern about our overall baseload capability, especially as regards what he calls our AI arms race with China. Burgum told the Senate Energy and Natural Resources Committee that if we lose the AI arms race to China, then that has got “direct impacts on our national security.” And,
- Third, perhaps most interesting is Burgum’s appointment by the President as a full-time member of the secretive and influential National Security Council (NSC). The current members of the NSC are: the President (Chair), Vice President, Secretary of State, Secretary of Defense, Secretary of Energy, Secretary of the Treasury, and the Assistant to the President for National Security Affairs (non-statutory member).
Our Senate source told SocoSIX that the appointment of Burgum to the NSC was a master stroke. Burgum calls America’s public lands and waters “our balance sheet.” He commented that Burgum’s inclusion reflects two important factors: First, the President likes him; he was, after all, the runner-up to JD Vance in the vice-presidential stakes. And second, the President cares deeply about Burgum’s portfolio — energy, critical minerals mining, and powering AI. These components are considered crucial to national security as the U.S. fights for “energy dominance” and competes with China for continued global supremacy. From his role as North Dakota Governor to his private sector experiences, he is viewed as a cabinet secretary who is both wise and pragmatic.
Comment: Any way one looks at it, Burgum’s role on the NSC is reflective of the role of energy in national security. Not only does Trump like him, but Burgum is characterized as having expertise in energy and minerals as well as possessing a measured demeanor, business acumen and experience as a two-term governor of a deeply red state. By adding the Interior Secretary to his NSC, Burgum will participate in regular meetings with the other principals on the council and help coordinate responses to national security crises. While any agency or department head can be asked to join an NSC meeting that is relevant to their area of specialization (The Homeland Security Secretary was often included during the Biden Administration, for example), being a member of the NSC means that Burgum will have a seat at the table to weigh in on a wide range of national security issues that do not necessarily have anything to do with areas of immediate concern to him. This fact alone should pay dividends to the American public. End Comment.
“FORTRESS CHINA,” BUT IS ITS ECONOMY SOARING OR SHRINKING?
We have all heard the term “Fortress America:” a term applied to the USA during and after World War II when U.S. industry dominated the globe. In many ways, the term might now be applied to China, especially if its developmental plans, as reiterated by President Xi Jinping, come to final fruition in a few years’ time. According to a specialist on China’s economy at the Carnegie Foundation, China is rapidly becoming self-sufficient in almost every industrial category – old, new, and cutting edge. Instead of relying on foreign firms for robots and medical devices, China now makes more of its own. Chinese-made solar panels, electric vehicles, artificial intelligence, and advanced computer chips are also helping the country become less reliant on the outside world’s products and technology.
Beneath those wins, however, our Carnegie analyst opines that President Xi’s industrial policy is hugely expensive and is eating up state resources at a time when government revenues are stagnating. According to this source, there are two competing narratives about China’s economy: One focuses on the narrative of economic decline, while the second one speaks about growing economic and technological power. These narratives may appear contradictory, according to our source, but both are true.
As near daily news reports suggest, China’s economy has slowed substantially. Local governments are straining under debt burdens. The property sector has nearly collapsed. Consumer confidence is poor. And China’s GDP is no longer catching up to that of the United States. Yet, China remains the top global manufacturer, leading in the export of many goods. Beijing also invests heavily in high-tech sectors and innovates rapidly and usually under the radar. (The artificial intelligence company, DeepSeek, is just the latest example). The booming tech industry, however, is not large enough to offset overall weakness in China’s “old economy,” according to our source.
Comment: Where does this leave our Washington policymaker or corporate business leader? The principal lesson is not to confuse micro and macro-economic trends. Although the overall economy faces headwinds which will not be easily overcome, the part of the Chinese economy represented by high-tech industries presents strategic challenges for U.S. companies which will be difficult to counter. A ‘slowing economy’ should not be interpreted as meaning an industrially or technologically “weaker China.” Our analyst says that he believes the Trump Administration understands this important distinction, which might explain why the President – in spite of his waving of his tariff banner against Beijing — has indicated an openness to ‘a wide-ranging agreement’ with Beijing that would also include investments and nuclear security.
Details are understandably vague, and while our analyst conceded that this stance contrasts with Trump’s hardline position on China during his first term in office, as well as his continuing sanctions threats, the strategy oddly makes sense. He said that some of the so-called “China hawks” associated with the President are expressing concern that completely decoupling from Beijing might cause China to lash out if it feels it is being pushed into a corner, much like Japan’s position before Pearl Harbor because of our oil embargo. A total decoupling policy might also fail to achieve the President’s goal, which is to bolster the American economy and advantage in a way which dispels the prospect of a future nuclear holocaust. End Comment.
U.S. TARGETS CHINESE SHIPPING WITH PORT FEE INCREASES
The U.S. trade war with China may be escalating beyond tariffs with a plan by the Trump administration to impose steep fees on Chinese shipping companies and any Chinese-built vessels that enter U.S. ports. The proposal, unveiled on February 21 by the office of the U.S. Trade Representative (USTR), would impose millions of dollars in new fees each time one of these vessels enters a U.S. port, adding costs that would likely be passed down to U.S. importers and exporters through higher freight rates. The proposal is open to public comments until a March 24 hearing.
If implemented, the move would directly hit Chinese-owned COSCO, the world’s biggest shipping company in terms of capacity, as well as other well-known shipping companies such as Maersk, from Denmark and MSC, the Italian/Swiss conglomerate which boasts the largest container fleet in the world. Additionally, both companies have purchased dozens of container ships and tankers from China’s multiple, massive shipyards, which may also subject them to additional fees.
Comment: Our Commerce source told us that this plan is in response to a U.S. probe that began during the Biden Administration in March 2024. USTR determined in January 2025 that China was involved in unfair trade practices in the maritime, logistics, and shipbuilding sectors, and the proposed, hefty fees are the result. One fee would require Chinese-built ships to pay fees of up to $1 million for each U.S. port call based on the total size of a company’s Chinese fleet, even if not all these vessels sail to the U.S. A second proposed $1 million fee would be based on how much of a company’s future ship orders come from Chinese shipyards. In addition, Chinese-owned operators like COSCO would be faced with an additional fee of up to $1 million for each U.S. port call based on the ship’s size. Finally, the proposal also mandates that a certain amount of U.S. exports be moved on U.S.-flagged and U.S.-built vessels, potentially restricting access for non-U.S. shipping companies. Our course expressed skepticism about how this final mandate could be executed efficiently, given the paltry state of the U.S. maritime fleet which possesses only 2.6 % of the world’s merchant fleet (versus 17.6% for Greece and 11.6% for China in 2021). End Comment.
HONEYWELL PLANNING SPLIT TO EMULATE GE’S SUCCESS
One of the last American industrial conglomerates – Honeywell – announced plans on February 6 to separate its aerospace division from its automation business. It will also move ahead with plans to split off its advanced-materials arm. The result will create three separate, independent companies: aerospace, automation and advanced materials. Honeywell expects the new companies to have greater financial flexibility and focused management teams.
The aerospace arm should do especially well. Airplane parts are in high demand. Both Airbus and Boeing have huge order backlogs, which offers Honeywell, which supplies engine systems and cockpit displays, near-instant markets. Meanwhile, as airlines wait for their new planes to arrive, they need to keep the old ones up and running for longer. And with the problem of counterfeit parts – mostly from Asia – creating a headache for airlines, Honeywell’s proven track record should serve it well as a source for reliable, cutting-edge replacement inventory.
Finally, while the Trump Administration is looking for serious cuts in the defense budget over the next four years, these cuts will be in programs and personnel which are seen as not mission critical. New military systems and the maintenance of older, reliable ones will be a new priority. Honeywell should be in a superior position to benefit from these new purchasing requirements.
Comment: The move follows pressure from activist investor group (Elliott Investment Management). According to a respected market analyst from JP Morgan, one of the key reasons for this breakup is to try to emulate the action taken by GE back in 2022 when it successfully spun off its aerospace division. The new company, GE Aerospace, quickly prospered to an extent where it is currently worth more than the combined entity was at the time of the spinoff. Asked why this was the case, our analyst commented that breaking up a big, diverse company like GE or Honeywell gives investors opportunities to buy the items they want, rather than having these bundled together to other, less attractive items. End Comment.
U.S. ANTI-CORRUPTION LAW ON HOLD
President Trump has directed the Department of Justice to shift the focus of a decades-old law (called the Foreign Corrupt Practices Act or FCPA) that prohibits American corporations from bribing foreign government officials to advance their own financial interests. On February 20, he signed an Executive Order which also directs Attorney General Pam Bondi to pause DOJ enforcement entirely for at least 180 days until she issues new, unspecified enforcement guidelines. The President complained that the anti-corruption measure, which was signed into law by then-President Jimmy Carter in 1978, was a “disaster for this country” because it made it very hard, from a practical standpoint, to make deals overseas without violating the law, implying that bribes are expected to be a routine part of business, including for American companies.
Comment: Companies hoping to soften their anti-corruption and FCPA compliance programs should give no weight to that notion, legal and compliance observers have told corporate integrity professionals who have asked this question. If they do so, they risk investigations from overseas authorities or even an increase in employee misconduct unrelated to the FCPA. It is quite clear that U.S. business has been hindered on occasion by our inability to compete with some other countries who routinely offer inducements to host country nationals to sway projects or the purchase of equipment their way. It can be argued that, in the end, this usually makes the product more expensive as the cost of the bribe is eventually passed down to the end-user. More common is the presumption that many deals cannot be consummated because nobody wants to feel that whenever they pick up a phone, they risk going to jail. It will be interesting to see what alternatives the Attorney General comes up with – and when. End Comment.
