What’s at Stake Ahead of Trump-Putin Meeting

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2:06It's going to be up to him. We're going to see what he has to say. Well, this Friday, those two leaders are scheduled to meet one-on-one to talk about the prospects for a peace agreement. Here's Trump speaking to reporters on Wednesday. Will Russia face any consequences if Vladimir Putin does not agree to stop the war after your meeting on Friday? Yes, they will. What will the consequences be? There will be consequences. Ascensions, tariffs? There will be. I don't have to say. There will be very severe consequences, yes. The setting for Friday's summit? Alaska, of all places. Bloomberg's Flavia Kraus-Jackson is overseeing our coverage of this meeting, and she says its location is striking.

2:45Because if you're President Vladimir Putin, Alaska is the perfect venue. It isn't lost on the Kremlin, for example, that Friday's summit is going to be held in the U.S. state that once belonged to Russia until it was sold. For$7.2 million in 1867, and that at the time was considered a folly and a bad deal for the Americans. So you have the scene setting going into this meeting where you have Trump, the property-minded mogul president, who might just be ready to do a real estate deal that trades land for peace. This time around, it's land in Ukraine that could be a bargaining chip. But that country's president, Volodymyr Zelensky, has been insistent Ukraine won't concede any territory to Russia.

3:27Zelensky spoke to reporters on Wednesday, following a call with other European leaders and President Trump. Everything regarding Ukraine needs to be discussed with Ukraine. We have to be part of this conversation. But Zelensky still doesn't have an invite to Friday's meeting. Zelensky right now is not at the table. Putin doesn't want him there. And he's in the slightly unenviable position to see what kind of scraps he may be given and what kind of agency he has.

4:01Ahead of this summit, I wanted to talk to Flavia about why Russia has decided now is the time to talk. to ask her what's likely to happen in Anchorage when Presidents Trump and Putin meet and how significant this summit is likely to be. I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, President Trump heads to Alaska, the last frontier, the 49th state, for a face-to-face meeting with his Russian counterpart, Vladimir Putin.

4:33Why now? It's a basic but fundamental question, and Bloomberg's Flavia Krauss-Jackson and her team have been trying to answer it. Why did President Putin decide, after a meeting with one of President Trump's advisers, Steve Witkoff, to agree to a meeting with Trump? I think the answer to that is good old-fashioned economic coercion. The Russian economy is just not doing very well. And what Trump has sort of finally done is pull those levers that essentially compelled Putin to come to the table. President Trump talked about this during an interview on CNBC last week. Putin will stop killing people if you get energy down another$10 a barrel.

5:13He's going to have no choice because his economy stinks. President Trump has threatened these secondary sanctions on China and India, among other countries, for their oil purchases. How much is that economic vice really squeezing President Putin? I think it's absolutely critical. and it's probably the thing that people are talking about the least. Growth is stalling. Oil revenues have slumped. The budget deficit has hit a record. Inflation and interest rates are very high. And behind the walls of the country's banking sector, insiders have been sounding the alarm about a looming debt crisis. Now, until now, Kuznets really tried to maintain economic stability whilst running a very expensive, what he calls, special military operation.

5:54And he's really counting on the incredibly high pain threshold of Russians to sort of indulge him as he kind of spends his way into trying to win this war. For a while, that seemed to work. But in recent months, Russia's wartime economy has shown signs of strain. And Flavia says a team of Bloomberg journalists has been looking closely at the pressure it's been under. We've spoken now to officials past and present and we've scoured documents. And on paper, the banking system looks like it's in relatively good nick with robust profits. However, what's really happened behind the scenes is the central bank itself has advised lenders to focus on restructuring credit instead of recognizing the full extent of souring loans.

6:39So what you have really happening is essentially the perfect storm, which means that right now Putin is in a position of, OK, oil prices are where they are. If indeed they drop, I'm in real trouble. Russia invaded Ukraine in 2022. It annexed Crimea in 2014. And this war is playing out on Ukrainian soil. But it doesn't seem like these talks in Anchorage, Alaska, are going to include Ukraine's president, Volodymyr Zelensky, who's been unequivocal that the country is unwilling to forfeit any of its territory to Russia. Zelensky stated that any peace deal excluding Kiev would lead to dead solutions.

7:22Any decisions that are against us, any decisions that are without Ukraine, are at the same time decisions against peace. What does that tell you, his exclusion from how these talks are likely to unfold? I mean, it's very bad news and in a way not surprising at all. Trump essentially has not put Putin and Zelensky on the same level. He considers Putin a peer and Zelensky not to be a peer. He considers Putin strong and Zelensky weak. Your country is in big trouble. No, no, you've done a lot of talking. And I think what we witnessed in the Oval Office and those sort of very shocking and surprising scenes where Zelensky was openly humiliated.

8:03Your country is in big trouble. I know. You're not winning. You're not winning this. It became very clear even then that Zelensky really has no power in this relationship and that the best he can do is not publicly make a fuss, certainly not complain and try and work behind the scenes. Trump has promised to keep him abreast and to call him later. I don't exclude this being Trump, that something might happen where they're in a meeting in Anchorage and perhaps Trump decides to call Zelensky and put him on speaker. All of these things are possible when you're trying to work out what someone like Trump could do.

8:43But right now, Zelensky is on the outs and he has to make do with a very bad situation. Coming up, what we know about how these negotiations are going to play out, what's likely to be on the table this week, and what President Trump hopes he's going to get out of the summit.

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11:16Earlier in the week, President Trump alarmed European leaders by suggesting that a peace deal in Ukraine would require land swapping. He's since softened that stance, reportedly telling European leaders on Wednesday that only Ukraine could negotiate territorial concessions. So what is on the table for this meeting between Presidents Trump and Putin on Friday? Putin essentially wants Ukraine to cede five territories. And as early as August, Russia occupied nearly a fifth of Ukraine. And its offensive has stretched across the front line of more than a thousand kilometers. That's 621 miles. So Russia essentially wants to sort of keep that, even some of the territories that it doesn't actually completely control.

11:58And what you have on the other side is Zelensky and his European allies very committed to the principle that international borders cannot be changed by force. Zelensky has repeatedly said that Ukraine's goal is to restore its borders to what they were when the country gained independence. And that includes Crimea. Now, the reality is that Crimea has been lost. It was annexed in 2014. And there is very much an understanding that Ukraine will not be able to get that back. But, you know, as everyone knows from, you know, good negotiation tactics is that you don't come to the negotiating table sort of essentially already having given away the farm.

12:34And I think there's a lot of concern that essentially coming here, the chronology of all this is incredibly important. You know, first you need to have the ceasefire and then you talk about the terms. Whilst Putin is very much coming with the idea of like, give me this and then I will consider the rest. Zelensky is no fool, and the Europeans have absolutely no leverage beyond the rhetoric that they use aggressively. They understand that Ukraine will lose territory. But, you know, which territories and how much is really absolutely key. One of the absolute red lines for Putin is NATO membership.

13:12It does not want Ukraine ever to be part of NATO. So I expect that to come up as well. All this has made European leaders very anxious, concerned President Putin is going to convince President Trump to support Putin's demands for territory. Trump said his call with European leaders on Wednesday was very friendly. We had a very good call. He was on the call. President Zelensky was on the call. I would rate it a 10. And after the call, German Chancellor Friedrich Mertz said he had hope for peace in Ukraine. We as Europeans are doing everything we can to set the agenda, help set the agenda for that meeting.

13:52We're hoping that Donald Trump has success in that meeting. The anxiety among European leaders is palpable here. They've had a couple of meetings since this summit was announced. To what extent is President Trump taking their concern into consideration as he prepares to go to this summit? I think the simple answer is not very much. I think this is a very important point to make. the role of J.D. Vance in all this. He's one of the most powerful VPs that we've seen in recent history. He has very strong views on Ukraine. His address to the Munich Security Conference, I think, was one of those historic moments when, you know, he really laid bare his contempt for Europe and what he thought of its leaders.

14:35The Trump administration is very concerned with European security and believes that we can come to a reasonable settlement between Russia and Ukraine. And we also believe that it's important in the coming years for Europe to step up in a big way to provide for its own defense. In that speech, Vice President Vance went on to criticize European leaders for allegedly suppressing free speech and for not taking, as he sees it, a hard enough stance on migration and other issues the Trump administration has prioritized. And I think that's a view very much that Trump shares. so he has his sort of personal relationships with the likes of you know UK's Keir Starmer or Emmanuel Macron the president of France that he may or may not like but I think facts have shown that arguably the UK and France are the sort of the strongest European military powers they're not in any real position to help Ukraine.

15:32Ukraine knows it, Russia knows it, the Americans know it. Funnily enough the Germans who were obviously after the second world war completely taken out of the picture have shown much more of a willingness to kind of step up in military spending and do their bit. But what you're looking at right now from the European perspective is that they're not able to scale up on anywhere near the level that the U.S. want for years. And what you're looking on the ground is a war of attrition where Russia is consistently and persistently gaining, albeit at a slow rate. And within three years, you're looking at a very, very different picture.

16:10And Europe simply does not have three years. So what the calculus here is that the U.S. is saying is like, we need to make a deal now. I've lost my patience. I will walk away. And if the U.S. walk away, then that is essentially laying the groundwork for Russia to just come in and eventually take over. We know that President Trump is no fan of these big multilateral summits, but he does love these one-on-one summits. He had them in his first term in Helsinki with President Putin. He had another one in Singapore. What do those past summits tell us about the way this is going to look and how it's likely to unfold?

16:47It's a very interesting thing to ponder about the number of times that these two men have met. They're about five or six. The most critical and most important, of course, was the summit in Helsinki. I think the world wants to see us get along. I think it's worth sort of reflecting how different the world was at the time. I mean, Finland was considered one of sort of the whisperers to Putin. And obviously, since the invasion, Finland has joined NATO. So it sort of reflects a very different geopolitical context of the time. But that was considered a pretty humiliating moment for Trump. I think it would be very interesting to see if the two of them come to the stage again in Alaska and what kind of lessons Trump and his advisors will have drawn from that.

17:34What we do know is that they've had an awful lot of conversations on the phone since Trump got re-elected. And as one of our sort of deep dives show, those conversations are pretty interesting because Trump seemed to sort of buy into a lot of the Putin propaganda. So every time he seemed to get off the phone with Putin, he was essentially parroting things like, for example, Zelensky was not legitimately elected or, you know, all kinds of talking points that would make the Kremlin very happy. We just spent two and a half hours talking to Vladimir Putin. And I think some progress has been made. So one thing to be watching out for very, very carefully is how Trump comes out of those meetings, you know, whether it'll be on Truth Social, whether he comes out and speaks to reporters.

18:23He seems so sad that he'll sort of work out very, very quickly what Putin wants within two minutes. And this is going to be a feeling out expedition. But, you know, as I said, I think we'll get a very clear sense of whether Putin has managed to play Trump by what Trump says. Do we have an understanding of the quality of the relationship between these two world leaders right now? I think it's very hard to judge the quality of that relationship, you know. And clearly, Putin wanted Trump elected in 2016 and was gleeful. And there was the whole thing about Russian interference and to what degree that happened.

19:01Now that that relationship has, I think, evolved to a certain degree. I don't think Putin has gotten maybe quite as much from Trump as maybe he wanted. I think for observers, even Kremlin observers, it was very interesting to see to what extent, at what point would the penny drop with Trump like that Putin was essentially stringing him along. And that took a lot longer than I think most people thought until Trump started saying some even vaguely critical things about Putin saying, well, I'm starting to get impatient or this is not good. But he seemed much more willing to throw Zelensky under a bus rather than ever question whether Putin's intentions were genuine in terms of peace.

19:45I was going to lob at you what I know is an unfair question, which is what President Trump's game plan is for these talks. But you mentioned his impatience with how this war has unfolded and how long it's lasted. Do we have any sense of what he hopes to get out of this? Yes, a deal. But what a favorable deal looks like to President Trump? I'm not even saying this jokingly. I think he wants a Nobel Peace Prize. He desperately hankers for that kind of recognition that he feels is one of his predecessors, Barack Obama, had. I don't think he really cares very much about what kind of deal it is and how favorable or unfavorable it is to Ukraine.

20:20He just wants to get it done. I think that's a very important sort of acknowledgement to make because for the Europeans who are essentially living it very closely, if it is a bad deal, the outlook is that Putin will do what he historically has done in the past. It's like he will take what he can, the ceasefire, he'll buy a little bit of time and then come back. You know, and so there's a sense of are we pursuing policies of appeasement where we sort of try and give Putin something in the hopes that he goes away, but he will keep coming back. I think from Trump's perspective, he's thinking more of like, let me get this done.

20:59This is something that I promised to do within 24 hours of my presidency. He's into legacy building. He wants to achieve peace in the Middle East. He's got very grand goals. And for him to be able to walk away from this saying, well, this is the deal. Take it or leave it. And if you don't take it, it's not my problem. Flavia, thank you very much. Thank you.

21:27This is The Big Take from Bloomberg News. I'm David Gurra. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you like this episode, make sure to follow and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.

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