Trump's Victory: What Should Kazakhstan Expect?

Donald Trump has become the US president for the second time. Trump’s arrival in the White House could have a significant global impact. Orda.kz has learned what to expect from the new US president.

Strong Dollar, Weak Oil

The most apparent connection between Kazakhstan and the United States is energy. Both countries are major players in the global oil market. If America decides to increase oil production, as Trump has alluded to, this could affect Kazakhstan's economy.

Anuar Bakhitkhanov believes Trump's victory could noticeably affect Kazakhstan's economy. The new American president will likely bolster protectionist policies, introduce new tariffs, and revise trade agreements.

This could slow global economic growth, reduce demand for energy resources and lead to a fall in oil prices. For Kazakhstan, whose economy is heavily dependent on oil exports, a price drop for this resource could negatively affect budget revenues and overall economic growth. Anuar Bakhitkhanov

Kazakhstanis may soon feel the effect of Donald Trump's victory on their wallets, as the Republican's victory may strengthen the dollar. The American currency rose in price very noticeably in October, and the tenge exchange rate may drop even further.

The dollar may strengthen due to possible tax cuts in the US and stimulation of domestic production. The strengthening of the dollar may lead to a weakening of the tenge, especially if oil prices fall. A decrease in the cost of oil and a strengthening of the dollar will double pressure on the tenge, which may lead to its devaluation,warns Anuar Bakhitkhanov . 

The economist sees several economic challenges for Kazakhstan in Trump's victory. They relate to a possible decrease in oil prices, a weakening tenge, and a potential reduction in economic cooperation with the United States.

Political scientist Gaziz Abishev also believes that Kazakhstan may have economic issues after Trump's election. However, timely risk assessment is crucial, and if necessary, establishing a dialogue with the White House head is also important.

There may be indirect damage, in the sense that Trump may start a trade war with China again, that America will increase oil production (and this will lead to a fall in world prices). This may happen, of course. But I think that, firstly, this is Trump's last term, and in two years he will become a 'lame duck.' Secondly, many countries have a rough understanding of his political style and will offer him more constructive options to minimize their effect. The world already has primary immunity against Trump's actions, concludes Gaziz Abishev.

Umbrella

Donald Trump has no reason to quarrel with Kazakhstan. On the contrary, it is in the long-term interests of the United States to be allies with our country, considering its ties with the US's main rivals, China and Russia. To what extent will Trump act?

Political scientist Andrey Chebotarev recalls that the "US Strategy for Central Asia for 2019-2025" was adopted during Donald Trump's first presidential term. The Biden administration fumbled it, and the Republicans may have to rectify the situation.

Trump's election may lead to the revision of the "US Integrated Country Strategy for Kazakhstan." In this document, Washington effectively stated that it would compete with Moscow and Beijing to gain influence in Astana.

The integrated strategy for Kazakhstan was adopted in 2022 by the Joe Biden Administration. The new administration can either completely revise it or make certain changes. In general, the energy factor decides a lot in Kazakh-American relations, namely the presence of two US oil and gas giants - Chevron and Exxon Mobil - in the oil and gas sector of Kazakhstan. This is, in particular, the Tengiz field. Our government is currently in litigation with consortiums developing Kashagan and Karachaganak, where European capital dominates, and is bringing multi-million dollar claims against them. But so far, everything is fine with Tengiz, political scientist Andrei Chebotarev says.

Indeed, cooperation between Kazakhstan and American oil giants has protected our country against possible political turbulence.

I think that overall we are in comfortable conditions for now. American oil companies work with us: Chevron, Shell, Exxon Mobil. I think this is a kind of 'umbrella' in the eyes of the American establishment. Kazakhstan behaves constructively and proceeds from its interests, and in those areas where the Americans work, we do not squeeze them much. In this sense, it seems to me, Kazakhstan has nothing to worry about, says Gaziz Abishev.

At the same time, economist Anuar Bakhitkhanov warns that US interest in Kazakhstan and Central Asia may decline. The Republican leader still prioritizes domestic policy over foreign policy.

Trump is known for his focus on domestic US issues and reducing international commitments. This could lead to a decrease in US interest in Central Asia, including Kazakhstan. As a result, the volume of economic cooperation and investment from the US could decrease, which will require Kazakhstan to find new partners and markets to diversify its economy, the economist says.

"Hawks" among "Elephants"

According to experts, Trump has two options for influencing Russia. The first and most apparent is diplomacy, and the second option is sanctions:

It is difficult to say how Donald Trump is going to end the war between Russia and Ukraine. Apparently, he is more interested in China's growing influence, including in terms of its impact on US interests in Europe and the Middle East. If we take the entire American elite, in my opinion, it was not so much the Republicans who defeated the Democrats, but the anti-Chinese party that defeated the anti-Russian party, which was personified by the administration of Joseph Biden. It cannot be said that Trump and his team are loyal to Russia, but they are not so interested in the Russian-Ukrainian armed conflict. Trump is unlikely to support Ukraine financially or with weapons supplies, as the Biden administration did, says Andrei Chebotarev.

Lifting sanctions against Russia and the secondary sanction risk for Kazakhstan remain unlikely. Political scientist Gaziz Abishev emphasizes that Donald Trump did not lift the sanctions imposed against the Russian Federation in 2014 during his first presidential term.

A lot will depend on what kind of team he assembles: in addition to Trump himself, there are many 'hawks' in the Republican establishment who are extremely anti-Russian, and Trump will largely base his policy on this. It must be understood that as soon as Trump takes the presidential seat and enters into direct negotiations - perhaps behind the scenes, secret - with Putin, he may encounter a position of Russia that is unacceptable to him. And in this situation, Trump will conduct not soft, but rather tough negotiations. If Russia shows firmness, Trump will regard this as insufficient flexibility and will begin to use countermeasures to force it to compromise. In this sense, one should not expect any abrupt lifting of sanctions,Gaziz Abishev

Another thing is that there may not be new sanctions against Russia.

Kazakhstan's companies will no longer worry about trade with the Russian Federation. Trump is interested in ending the Russian-Ukrainian war to reduce US spending. Gaziz Abishev still notes that the United States remains a direct competitor to Russia in terms of its main export products.

Meanwhile, political scientist Andrey Chebotarev expects the Trump administration to be less supportive of Ukraine, meaning negotiations between Ukraine and Russia are theoretically just around the corner.

China

Easing sanctions against Russia and stopping the close monitoring of supplies to Russia via Central Asia does not mean there are no other concerning fronts.

Trump may become an even more formidable opponent of China. Washington "hawks" could persuade Trump that putting pressure on Russia and China through Kazakhstan is viable. However, the probability of such an outcome is low.

This is unlikely for now. This will be, conditionally, the eighth option on the list: first, they will try to resolve the issue through negotiations,Gaziz Abishev believes.

If a trade and economic war breaks out again between the two world powers, Kazakhstan risks getting caught in the crossfire. Suppose the situation escalates to the point that the US begins to impose sanctions against China.

For Kazakhstan, China is an important trading partner and a potential participant in constructing Kazakhstan's first nuclear power plant.

The US foreign policy course will alter, one way or another. Countries could vie for Kazakhstan's support, the largest Central Asian economy, but the United States seems to have prioritized other regions.

It will be important for the Trump administration to stop China's growing influence, and he is ready to throw all available resources in this direction. In addition, he is more interested in the situation in the Middle East - at one time he was a very strong supporter of Israel and, in particular, recognized Jerusalem as the official capital of this state. In general, whoever is in power in the United States, the United States has much more interests in the Middle East than in the post-Soviet space. Therefore, I think there will be a fairly noticeable turnaround in US foreign policy, predicts Andrey Chebotarev .

Qasym-Jomart Toqayev congratulated Donald Trump on his victory and expressed hope for the “progressive development of bilateral cooperation.”

Original Author: Nikita Drobny