Ukrainian President Volodymyr Zelensky’s visit to the White House ended on a disappointing note as his hopes of securing the US’s advanced ‘Tomahawk’ missiles were thwarted. Zelensky, who had arrived with the expectation of obtaining long-range missiles to strengthen Ukraine’s fight against Russia, left without the weapons he sought. US President Donald Trump made it clear that the missiles would not be provided unless Zelensky demonstrated readiness to end the war. The ‘Tomahawk’ missiles, renowned for their capacity to penetrate deep into Russian territory, are considered a game-changer in military terms. However, Trump criticised Zelensky for appearing more focused on escalating the conflict rather than pursuing a resolution, marking a significant setback for the Ukrainian leader. In addition to the missile issue, Trump expressed support for a controversial proposal by Russia for an undersea rail tunnel connecting Alaska and Russia. The tunnel, which Zelensky had hoped to discuss, was met with approval by Trump, prompting Zelensky to cut his visit short. Russia has proposed that the project be undertaken in collaboration with billionaire Elon Musk’s Boring Company.
The tunnel would run from Russia’s Chukotka region to Alaska, passing beneath the Bering Strait. Kirill Dmitriev, representing Russian President Vladimir Putin’s investment initiatives, presented the plan to Musk, highlighting that Russia would cover half of the project’s estimated cost. The tunnel is projected to span approximately 100 kilometres, with construction costs initially estimated at $65 billion, equivalent to roughly ₹5.8 lakh crore. Dmitriev suggested that by utilising Boring Company technology, the cost could be reduced to $8 billion (around ₹70,000 crore), with completion achievable in eight years. Trump announced plans to meet Putin in Budapest, Hungary, in the near future. Ahead of the meeting, a high-level US delegation led by Secretary of State Marco Rubio is scheduled to hold discussions with Russian representatives.
Musk’s Silence and Russian Ties
While Russia has branded the Alaska-Russia rail tunnel as a “Putin-Trump” project, Elon Musk has not publicly responded to the proposal. Experts have raised concerns about the project’s feasibility due to the extreme sub-zero temperatures of the Bering Strait and frequent seismic activity. The Boring Company has no prior experience operating in such harsh conditions. Meanwhile, reports have emerged regarding Musk’s ongoing business connections with Russia. Tesla, his electric vehicle company, reportedly continues to purchase aluminium from Russian firm Rusal. In addition, The Wall Street Journal noted that Musk held private talks with Putin in 2022, and recent reports indicate that Putin, acting on behalf of China, requested Musk to halt Starlink operations in Taiwan.
US-China Relations and Trade Developments
In related developments, US Treasury Secretary Scott Bessant announced that representatives from the US and China will meet next week to negotiate an end to the ongoing trade war. Bessant is expected to hold discussions with Chinese Vice Premier He Lifeng as part of preparations for an upcoming meeting between Trump and Chinese President Xi Jinping. The prospect of easing trade tensions between the US and China has reduced the likelihood of Trump imposing additional tariffs on Chinese imports. Simultaneously, market concerns over the US banking sector’s bad loan crisis have eased, supporting a recovery in stock indices. In the US, the S&P 500 increased by 0.53 per cent, the Nasdaq by 0.52 per cent, and the Dow Jones by 0.52 per cent.
Gold and Oil Prices Decline
Expectations of improved geopolitical conditions and a potential end to economic uncertainties have led to declines in international gold and oil prices. Crude oil prices have dropped amid speculation that restrictions on Russian oil could be lifted, with WTI crude at $57 per barrel and Brent crude at $61 per barrel.
Gold has also softened, providing relief to buyers in the jewellery market. After peaking near $4,400 per ounce, gold prices fell to $4,189 and are currently trading at $4,249 per ounce, with India likely to see lower prices today. Market optimism that geopolitical tensions may ease has temporarily halted the upward trend in gold. The US dollar index rose 0.21 per cent to 98.54, while the 10-year US Treasury yield increased by 0.041 per cent to 4.014 per cent, exerting downward pressure on gold. Profit-taking further contributed to the decline in precious metals, with silver prices dropping from a record $54 to $51 per ounce. Zelensky’s visit highlighted the complex interplay between military aid, international diplomacy, and global economic factors. While Ukraine faces obstacles in obtaining advanced weaponry, initiatives such as the proposed Alaska-Russia tunnel illustrate the evolving dynamics in US-Russia relations, with significant implications for international trade and energy markets.
