• The relationship between Trump and Putin has long been a source of controversy.
• Analysts believe Trump could negotiate a peace deal with Ukraine on terms favorable to Russia.
• That could have serious consequences for both the U.S. and global economies, experts say.

With just a month to go until the presidential election, Donald Trump’s relationship with Russian President Vladimir Putin is once again in the spotlight.

In an upcoming book, Journalist Bob Woodward says the former president and Putin have a closer friendship than previously known.

Trump sent Putin COVID testing equipment for his personal use in early 2020, according to excerpts published Tuesday by CNN and the Washington Post.

The book also says Trump may have had up to seven phone conversations with Putin since leaving office in 2021, citing a Trump aide.

The Trump campaign denied the report. Spokesman Steve Cheung claimed it was “the work of a truly insane and deranged man suffering from a debilitating case of Trump Derangement Syndrome.”

The Kremlin said on Tuesday that Russia had received the COVID-19 testing kits, but added that Russia had sent kits to the US in return. It denied the seven calls Woodward said Trump had with Putin.

While speculation and criticism of Trump’s relationship with Russia’s autocratic leader is nothing new, it takes on new meaning given the possibility of a second Trump presidency.

The relationship between Trump and Putin

Just weeks before Trump took office following his presidential victory, his incoming administration was rocked by the publication of a dossier prepared by a former British spy.

The report said the Kremlin had secured compromising information that it could use to blackmail Trump.

Trump’s legal team said the dossier contained inaccurate information and violated his privacy rights.

A subsequent investigation by special counsel Robert Mueller found no evidence of coordination between Putin and the Trump campaign.

However, throughout his presidency, Trump remained friendly toward Putin and was hesitant to criticize Russia over reports of interference in the 2016 U.S. presidential election.

Trump continued to praise Putin for it “clever” And “Genius” after he began his unprovoked invasion of Ukraine.

“I’d say that’s pretty smart. He takes over a country – really a huge, huge area, a great piece of land with a lot of people and just marches in,” Trump said in 2022.

A Ukraine deal

The U.S. under President Joe Biden has provided billions in aid to Ukraine to combat Russia’s 2022 invasion, which the president has described as a battle between the forces of democracy and tyranny.

Still, Trump has questioned why the U.S. is helping Ukraine’s defense and earlier this year urged Republicans in Congress to block a Ukraine aid bill, which has left Ukraine suffering from ammunition shortages.

He has claimed that if he became president he would be able to quickly negotiate a peace deal between Ukraine and Russia.

And although he has offered few details, a peace plan proposed by his vice president, JD Vance, in a podcast in September suggests that Ukraine would cede Russian-held territory and promise neutrality.

Hypothetically, Trump could force Ukrainian President Volodymyr Zelensky to agree to the deal, otherwise he could face a cutoff of US aid.

Critics say it’s a deal likely to please the Kremlin and anger U.S. allies in Europe and beyond. It could also come back to haunt the USA.

It could have catastrophic consequences

Philip Ingram, a former British military intelligence officer, told Business Insider that a Trump deal with Putin that included ceding Ukrainian territory could have catastrophic consequences.

“I think if Trump forces Zelensky into a peace deal where he has to give up any territory, then that will trigger the start of World War III, and that will happen within a relatively short period of time,” he said.

“And the economic impact that this will have around the world will be enormous.”

The war in Ukraine has already shaken markets for food, oil, gas and other products, and a larger conflict could have even more devastating effects.

Economist Kenneth Rogoff warned in an article for the International Monetary Fund that the war was exacerbating “rising inflation, extreme poverty, increasing food insecurity, deglobalization and increasing environmental degradation.”

William Pomerantz, an analyst at the Wilson Center in Washington, DC, told BI that a deal would cause enormous damage to US alliances.

“Trump believes he can end the war in Ukraine in a week, but to do that he would have to give in to all of Putin’s demands,” he said.

“That would essentially end our alliance with Europe and our international credibility.”

Strengthen China

Some Republicans, including Vance, say the U.S. needs to change its stance away from supporting Ukraine in its fight against Russian aggression and toward the more pressing threat they say comes from China.

Still, analysts told BI in July that China’s threat was closely linked to Russia’s, as Putin and fellow Chinese autocrat Xi Jinping had struck a pact to weaken U.S. global dominance.

A Russian victory in Ukraine would likely encourage Xi to launch an invasion of U.S. ally Taiwan, Ingram said.

If Xi believes the West has “given in” on Russia’s invasion of Ukraine despite spending money and diplomatic efforts to defeat Russia, “we would very quickly see its invasion of Taiwan,” he said.

European leaders have also issued strong warnings that Russia, emboldened by its territorial victory in Ukraine, could try to attack a NATO state in as little as five years.

Intensifying conflicts in Asia, Europe and the Middle East would have devastating economic consequences.

JPMorgan CEO Jamie Dimon warned last month that investors are overlooking geopolitical tensions as a key risk that could significantly weaken the global economy.

“Geopolitics is getting worse, it’s not getting better. There is a possibility of accidents in the energy supply. God knows if other countries will get involved. There’s a lot of war going on right now,” Dimon said CNBC-TV18 during a visit to India.

Dimon said if geopolitical tensions lead to instability and conflict, it will drag down the stock market in a way that pales in comparison to previous market crashes.

Trump’s words and actions vary

Ingram noted that there has been a gap between Trump’s words and actions in the past, and questioned whether Trump would be willing to risk the economic blow to the U.S. by cutting off aid to Ukraine, given that defense manufacturing companies in… Swing states like Pennsylvania would receive a massive boost from Congress’ aid legislation.

“What we hear from him from a policy standpoint, but what he would actually do, will be different,” Ingram said.

It is also unclear whether Trump would continue to impose sanctions on Russia if he becomes president.

“It’s much harder to predict in that regard,” William Reinsch, senior adviser at the Center for Strategic and International Studies, told the Wall Street Journal in August. “I would say he’s kind of inconsistent. He tends to vacillate from one thing to another.”

Either way, Trump will have to contend with economic problems at home, including record debt and rising interest payments.

According to a report released this week, Trump’s economic plans are expected to increase the national debt by twice what would be expected if Kamala Harris were elected.

Harris would add $3.5 trillion to projected household debt by 2035, while Trump would add $7.5 trillion, the Committee for Responsible Federal Budget Analysis said.

“Our large and growing national debt threatens to slow economic growth, boost interest rates and payments, weaken national security, constrain policy decisions and increase the risk of an eventual financial crisis,” she added.

If re-elected, Trump has promised to rid the U.S. government of those he believes are not loyal to his agenda and may surround himself with loyalists rather than career officials who want to control his more impulsive decisions.

Pomeranz said Trump’s policies in a second term would more openly express his admiration for the Russian leader, regardless of the U.S. economic plight.

“Putin is the autocratic leader Trump admires most,” he said. “Trump will present any end to hostilities (in Ukraine) as a personal victory, and Putin will confirm this.”