U.S. Companies Take Advantage of Ukraine War

Dec 5, 2022

Despite all the talk of the NATO alliance, the war in Ukraine has done nothing to slow the rivalry between U.S. and European companies. Instead, U.S. companies, backed by the U.S. government, are taking advantage of the war to push their advantage.

U.S. defense contractors obviously profit by selling weapons to the U.S. government, which the U.S. then gives to the Ukrainian military. But even the military aid provided to Ukraine by European countries like Germany and France often takes the form of purchases from giant U.S. companies. The war has also served as the excuse for the U.S. to push these countries to increase their own military budgets. While they have their own military industries, the U.S. is by far the dominant world player when it comes to selling weapons. So these increased military budgets will likely mean more cash flowing out of Europe and into the pockets of U.S. capitalists.

It’s not just military companies profiting. Before the invasion of Ukraine, the European countries got the bulk of the natural gas they use for heating, cooking, and energy production from Russia. In addition to the disruptions of war itself, the European countries have been moving to stop buying gas from Russia. And so, these countries have increasingly turned instead to buy liquified natural gas from U.S. oil companies. But the price Europeans pay for this gas is about four times what the same fuel costs in the U.S. This directly profits the U.S. companies that sell the gas, and it also gives U.S. factories an advantage since the price they pay for energy is so much less than their European rivals.

One U.S. official pointed out that companies reselling gas within Europe also make huge profits from importing and distributing natural gas, like France’s TotalEnergies, the biggest European importer of U.S. gas. True enough—there are sharks on both sides of the pond! But that doesn’t change the fact that the balance of economic power is swinging even more toward U.S. capital.

And despite all the talk of the European alliance, the U.S. government is reinforcing this swing. What the Biden Administration coyly termed the “Inflation Reduction Act” was really a package of many billions of dollars of subsidies to U.S. corporations. These subsidies give U.S. companies one more advantage against their European rivals, something the Europeans are well aware of. The Dutch Trade Minister said, "The Inflation Reduction Act is very worrying. The potential impact on the European economy is very big." The French Economy Minister even urged the EU to approve its own raft of subsidies to compete with the U.S., pointing out "We are in a world of power struggles."

During the Great Depression of the 1930s, economic rivalry accelerated to a trade war among the major imperialist countries. Not only did the reduction in trade lead to even more factory closures and job losses around the world, but it was also an important step on the road to World War II. We may be far from another war among the world’s major imperialist powers—but the unending rivalry among capitalist sharks, each looking to take maximum advantage of any weakness among their rivals, keeps such a possibility on the table, so long as these capitalist sharks continue to run the world.