How will Trump play his cards with sanctions against Russia?
Moscow probably has finally parted with illusions that President Trump and his administration will soon scrap American financial and economic sanctions. The recent statement made on Feb. 2 by the new U.S. ambassador to the United Nations, Nikki Haley, makes this clear.
“Crimea is a part of Ukraine,” Haley declared in her first public remarks before the UN Security Council. “Our Crimea-related sanctions will remain in place until Russia returns control of the peninsula to Ukraine.”
“Eastern Ukraine, of course, is not the only part of the country suffering from Russia's aggressive actions,” she said. “The United States continues to condemn and call for an immediate end to the Russian occupation of Crimea.”
The Crimean people have spoken
The U.S. ambassador, of course, has the duty to spell out Trump’s foreign policy concerns and goals. By making the ‘return’ of Crimea to Ukraine a condition for improving relations with Russia, she has sent a signal that relations will not improve in the foreseeable future.
The 2014 Crimean referendum was a clear indication that the vast majority of Crimeans want to be a part of the Russian Federation, and public opinion in the mainland is also staunchly in support of this reunion. It’s safe to say that Moscow will not budge an inch to accommodate the demands of a foreign power.
Should President Trump, however, continue with these demands then the chances of meaningful cooperation on important issues – Syria, Iran’s nuclear and missile technologies, and Beijing’s growing assertiveness in the South China Sea – will be very slim.
Money talks
Still, it’s too early to read the last rites for this new ‘reset,’ which is a word that Trump personally dislikes very much.
The possible clue to the new school of thought taking shape in the White House could be found in the decision by the U.S. Treasury Department to ease some financial sanctions imposed on the FSB.
U.S. eases sanctions against Russia’s security services
White House press secretary Sean Spicer explained that the decision was a “fairly common practice,” and that the Treasury Department has applied “specific carve-outs” for particular industries to alleviate the effect of sanctions.
The fact is that the FSB is in charge of import licenses on technology products with encryption functions, such as mobile phones or laptops, and by sanctioning this agency the U.S. government hinders export deals between Russian and American companies.
This case could be viewed as a triumph of pragmatism over politics. Trump is a shrewd businessman, and he champions the rebirth of manufacturing industries in America.
Bromance over before it began?
So, what about the ‘bromance’ between Donald Trump and Vladimir Putin, much-anticipated by some, and feared by others? Has it nose-dived and crashed before it even took off? Not exactly. The situation can develop both ways.
When talking about paving the way toward a bromance with Putin, the new White House tenant was cautious as a seasoned diplomat. “I hope we have a fantastic relationship. That's possible, and it's also possible that we won't. We will see what happens,” said Trump.
There is a strong likelihood that the test for mending Obama-ruptured bilateral relations will come in the form of a bargain. The first trial balloon sent by Trump – the offer to dump sanctions in return for a comprehensive agreement on additional nuclear arms cuts – disappeared into the blue without a trace.
The next offer might have even more geopolitical overtones. Henry Kissinger seems to be whispering into Trump’s ear. So the price tag of removing sanctions could amount to a suggestion that Moscow forgets its ‘pivot to Asia,’ or rather pivot to China, and comes into the fold of the Western alliance.
Similar combinations of foreign policy cards might be used for trade-offs, and could also appear on the table. Moscow could receive a proposal to distance itself from Iran, or accept ‘security zones’ in Syria, and/or open the domestic market for American business at the expense of the Europeans.
The blessing of Western sanctions
True, a ‘bromance’ cannot be excluded if Moscow agrees to pay a high price for accommodating the abrasive and hectic style of Trump’s foreign policy. Naturally, the multi-billion dollar question is whether Putin’s Russia is ready for such trade-offs?
U.S. and EU sanctions were detrimental for the Russian economy in the sense that they managed to slow the accelerated development of certain sectors. The data, however, shows that depressed global oil prices bear more responsibility for the slowdown.
Overall, however, sanctions have had a positive effect. For example, Russia’s counter-sanctions against EU food and agricultural products have emboldened local producers. The Russian agricultural sector posted 4.8 percent growth in 2016, and Russia is now one of the top grain exporters and has a 15 percent share of the global grain market.
Some forecasts might seem rather optimistic but not unfounded. There is one prognosis that in 10 years Russia’s food and agricultural exports could equal revenues from natural gas sales and total nearly $50 billion.
Apart from new opportunities for certain sectors of the Russian economy, Western sanctions also kickstarted positive trends in the social sphere. It provoked patriotic sentiments, weakened the so-called ‘liberal’ opposition, accelerated the nationalization of elites, and created consensus on key challenges facing the country. Last but not least, sanctions have boosted Putin’s popularity ratings.
The U.S. and EU sanctions have brought so many unexpected benefits that it would be a shame to give them up for the sake of simply improving relations with the superpower on the other side of the globe.
In the deeper historical perspective, let’s remember that ever since the Bolshevik Revolution, Russia has been continuously – even despite short spells of détente – subjected to Western sanctions of some kind.
The mood of my compatriots reminds me of the “Song of the Open Road” by Walt Whitman: “Still here I carry my old delicious burdens, I carry them, men and women, I carry them with me wherever I go, I swear it is impossible for me to get rid of them, I am fill’d with them, and I will fill them in return.”
A century of efforts to contain Russia only have fostered national strength to withstand such mistreatment.
Vladimir Mikheev is a freelance commentator for Russia Beyond The Headlines. His opinion does not reflect the position of RBTH or its staff.