Trump’s Proposed Economic Rapprochement With Russia is Wrongheaded

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Analysis Trump’s Proposed Economic Rapprochement With Russia is Wrongheaded Sanctions are sticky, the Russian economy is dodgy, and almost all it sells is oil. Where is the upside? By Keith Johnson , a reporter at Foreign Policy covering geoeconomics and energy. Russian President Vladimir Putin and U.S. President Donald Trump look at each other. Russian President Vladimir Putin and U.S. President Donald Trump attend a meeting during the G-20 summit in Osaka, Japan, on June 28, 2019. Brendan Smialowski/AFP via Getty Images My FP: Follow topics and authors to get straight to what you like. Exclusively for FP subscribers. Subscribe Now | Log In United States Russia February 26, 2025, 3:04 PM Comment icon View Comments ( 0 ) The Trump administration’s hopes for a grand economic rapprochement with Russia are either an inducement to Moscow in the ongoing peace talks over its three-year war in Ukraine, or a preemptive surrender by a U.S. president sadly familiar with waving the white flag before America’s adversaries. Trump’s Second Term Ongoing reports and analysis Either way, experts say the idea is ill-considered, poorly timed, doomed to fail, and counterproductive. Just four weeks after U.S. President Donald Trump threatened Russian President Vladimir Putin with harsher economic sanctions if a deal to end the war in Ukraine is not reached, Trump and his team are breaking out the carrots. The Trump administration’s hopes for a grand economic rapprochement with Russia are either an inducement to Moscow in the ongoing peace talks over its three-year war in Ukraine, or a preemptive surrender by a U.S. president sadly familiar with waving the white flag before America’s adversaries. Trending Articles Trump’s Angry Meeting With Zelensky Prompts Reactions Worldwide The responses were indicative of the shocking nature of the meeting. Powered By Advertisement Trump’s Angry Meeting With Zelensky Prompts Reactions Worldwide X Trump’s Second Term Ongoing reports and analysis Either way, experts say the idea is ill-considered, poorly timed, doomed to fail, and counterproductive. Just four weeks after U.S. President Donald Trump threatened Russian President Vladimir Putin with harsher economic sanctions if a deal to end the war in Ukraine is not reached, Trump and his team are breaking out the carrots. Trump himself praised his talks with Putin and promised “major economic development transactions” with Moscow. After talks with his Russian counterparts last week in Saudi Arabia, U.S. Secretary of State Marco Rubio, once known as a foreign-policy hawk, said that a Russia-Ukraine peace deal could unlock “incredible opportunities” for the United States to partner with Russia. Steve Witkoff, Trump’s special envoy to the Middle East and now apparently his latest channel to Moscow, said that a peace deal over Ukraine would bring U.S. businesses back to Russia. Mike Waltz, the U.S. national security advisor, told reporters that one week of diplomacy with Moscow could quickly lead to “very productive and stabilizing relationships” with the country that a former Republican presidential candidate once called the United States’ main “geopolitical foe.” “If this is how Rubio and Waltz are steering the ship, they are heading straight for an iceberg,” said Steven Pifer, a former U.S. ambassador to Ukraine and veteran diplomat. The problem is not just that economic normalization and sanctions relief are some of the most coveted items on the Kremlin’s wishlist, behind only the annihilation of Ukrainian nationhood. Nor is it that sanctions relief and a return to business as usual would only give Moscow the breathing space to rearm and try for Ukraine again, thus intensifying the security burden on a NATO and a Europe that has, in the space of less than two weeks, had to learn to live without a U.S. security umbrella that had been happily unfurled for 75 years. One big issue is that a U.S. pledge to restore economic relations means a relief in sanctions, just when the United States and the West had finally managed to get Russia to a place where the curbs on energy exports, tech imports, and other money movements were finally paying dividends. Leverage, as Euclid elucidated centuries ago, means not losing sight of the sharp end of the stick. That aside, the notion of Russia’s economy as an “investment prospect” is itself dubious. This is a place with 21 percent interest rates , inflation that is higher than what hurt former President Joe Biden, and labor and supply chain problems that would vex nimble economies, let alone sclerotic ones. Couple that with the absolute lack of rule of law—Russia is a place where investments are placeholders, not assets; those who find themselves in favor with the Kremlin end up in resorts such as Sochi, while those who don’t end up in Siberia —and you can see why U.S. businesses have cold feet . That did not dissuade Rubio or Witkoff from dangling economic concessions, but then, this is a new, and seemingly naive, administration. “Russia is a great first date. They show up looking like a million bucks, and then, of course, they lure you in, hand you to the tough guys and bureaucrats, and then work you over,” said Craig Kennedy, a former investment banker in Russia who is now at Harvard University’s Davis Center for Russian and Eurasian Studies. Western companies—from automakers, to IT firms, to fast-food restaurants— have fled Russia for the most part since Moscow’s full-scale invasion of Ukraine, though some, such as Air Serbia, have stayed . The costs for Russia are huge, while the costs for Western firms of either leaving or staying are even higher: Western firms had to either pay extortionate “exit fees” in the form of taxes on their way out or face the threat of reprisals if they come back. This is not the commodity-fueled, early 2000s Russian economy with a laptop and lap dance for everyone. Read More Russian President Vladimir Putin, Chinese President Xi Jinping, and other participants pose for a family photo during the BRICS summit in Kazan, Russia. A Grand Bargain With Russia Would Be a Disaster Trump thinks he can follow in Nixon’s footsteps. Argument | Christian Caryl Vladimir Putin gestures while sitting in front of a large blue map. Putin’s Real Motivation for Negotiating Nine thinkers on what’s next for Europe and Ukraine. Analysis | Agathe Demarais A Ukrainian serviceman trains in the woods near the frontline in Ukraine. Three Years On, What’s Next for Europe and Ukraine? Nine thinkers on the bombshells coming out of Washington. Analysis | Daniel Fried , Ulrich Speck , Agathe Demarais , Nathalie Tocci , Garvan Walshe , C. Raja Mohan , Jo Inge Bekkevold , Mick Ryan , Keir Giles , Stefan Theil U.S. economic sanctions are also sticky. Many of the ones on Russia have been there since 2014, when Moscow first invaded Ukraine and annexed Crimea. Some, though not all, are congressionally mandated, which means undoing them would require a functional and compliant U.S. Congress. U.S. companies—especially banks—are deeply allergic to doing business in places that are or just were under sanctions. Ask Iran just how quickly business-as–usual snaps back once the executive order is signed. Even more bizarre is that Russia’s economy depends on fossil fuel exports, as do Trump’s plans for U.S. energy dominance. To the extent that Trump offers Russia sanctions relief—and there are a few wonky things that could expire in the next day and the next two weeks, energy-sanctions wise—he will be directly working against the thing he told voters he would be making stronger, not weaker. If Russia gets the financial cuffs taken off, the first thing it is going to do is flood Europe with cheap gas , which will thrill the Germans and appall everyone on the U.S. Gulf coast, who were hoping to send fleets of tankers full of U.S. natural gas to Europe. Sign up for Editors’ Picks A curated selection of FP’s must-read stories. Sign Up By submitting your email, you agree to the Privacy Policy and Terms of Use and to receive email correspondence from us. You may opt out at any time. Enter your email Sign Up ✓ Signed Up You’re on the list! More ways to stay updated on global news: FP Live Enter your email Sign Up ✓ Signed Up World Brief Enter your email Sign Up ✓ Signed Up China Brief Enter your email Sign Up ✓ Signed Up South Asia Brief Enter your email Sign Up ✓ Signed Up Situation Report Enter your email Sign Up ✓ Signed Up View All Newsletters Trump likes to play at geopolitics, even if diplomats and longtime observers fret, worry, and wonder. His gambits to take over Greenland, Panama, Gaza, and Ukraine are alarming and revealing. Moving pieces on a board is easier than moving pieces and people in real life. “The risk thing, it was fun when I was 15,” Pifer said. “I am not sure it is a guide to geopolitics today.” This post is part of FP’s ongoing coverage of the Trump administration . Follow along here . Keith Johnson is a reporter at Foreign Policy covering geoeconomics and energy. X: @KFJ_FP Read More On Donald Trump | Russia | U.S. Economic Sanctions | United States | Vladimir Putin | War Join the Conversation Commenting on this and other recent articles is just one benefit of a Foreign Policy subscription. Already a subscriber? Log In . Subscribe Subscribe View 0 Comments Join the Conversation Join the conversation on this and other recent Foreign Policy articles when you subscribe now. Subscribe Subscribe Not your account? Log out View 0 Comments Join the Conversation Please follow our comment guidelines , stay on topic, and be civil, courteous, and respectful of others’ beliefs. You are commenting as . Change your username | Log out Change your username: Username I agree to abide by FP’s comment guidelines . (Required) Confirm CANCEL Confirm your username to get started. The default username below has been generated using the first name and last initial on your FP subscriber account. 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