President Donald Trump has signed, albeit begrudgingly, a new round of sanctions targeting Russia. They modestly tighten the sectoral sanctions currently in place, measures that limit the access of Russian companies to both capital and technology, and critically, curtail Trump’s ability to unilaterally deal with Russia. For what it’s worth, the latter step seems prudent for a number of reasons: systemic lies within and outside of the administration regarding ties and interactions with Russia, and a highly unusual policy consistency regarding the issue, an uncanny lack of criticism directed towards Vladimir Putin. Even for those who hope for a better relationship with Russia (I certainly do), it seems clear that Trump cannot be trusted to deal credibly with Moscow, a conclusion that leaders in Washington from both parties apparently agree with. But on a broader level, what are the longer term implications for the bilateral relationship here?
On the US side, structural factors mean these sanctions are sticking around for a long time. Namely, it seems improbably there will be much political incentive for Congress to remove them for the foreseeable future. After Trump’s tenure in office, one marred by alleged Russia links, Republicans will feel pressure to pursue a tougher line to address/compensate for that vulnerability. Vice President Mike Pence seems to be doing so already, in seeming contrast to the rest of the administration. Meanwhile, in pushing Trump on Russia, the Democrats have boxed themselves into (are now path dependent, as political scientists might put it) a tough line on Moscow. More broadly, and for both parties, the costs and benefits of policy adjustment favor the status quo as of today. The US stands to gain little by doing removing the sanctions (economically, and in terms of the global balance of power), and the potential costs in a dramatic downturn in relations (military conflict) are unimaginable — and therefore not politically salient. The same applies on a micro level: individual representatives lose nothing by taking a hard line on Russia, and stand to gain foreign policy ‘credit,’ as one might term it.
For Russia, the economic impact of the new measures will be marginal at most. Think of leaving an oil slick in front of a car with engine trouble, running on fumes. It’s a frustration, particularly in light of the high hopes Moscow had for a turnaround in relations, but it’s by no means Russia’s main economic challenge. For one, the sort of oil projects these sanctions target aren’t even economically viable given the current oil market. For a sense of numbers here, I’ve read that the removal of sanctions this year (before these new measures) would have increased Russia’s growth rate by about .2%. Not a whole lot, in short. As far as Russia’s capacity to respond, diplomatic measures seem the most likely (and prudent for Moscow) course of action. In that area, the Kremlin can inflict pain without risking its economic agenda.
Think of leaving an oil slick in front of a car with engine trouble, running on fumes. It’s a frustration, particularly in light of the high hopes Moscow had for a turnaround in relations, but it’s by no means Russia’s main economic challenge.
On the political side for Russia, this downturn may actually prove a slight reprieve for Putin. While the ‘Crimean Consensus’ – political legitimacy and a mandate derived from a tough foreign policy – has faded after years of economic recession and stagnation, the new sanctions stand to become an important messaging tool in Putin’s presidential campaign, especially as his staff struggles to neutralize Navalny – not necessarily a direct political threat, but certainly a thorn in the Kremlin’s side, and one with a message that has resonated.
In short, it may be the case that everybody involved – both Congress and Putin – has an incentive to play up measures that do not have that great an economic impact on Russia. Whether this is good policy by Congress is a whole matter in and of itself: I’m not sure this deters Russia from doing anything or will succeed in changing its policy at all. The big story here is the clipping of Trump’s wings in terms of dealing with Russia – followed by how the US attempts to avoid (if it attempts at all) to avoid a spat with Europe in light of its unilateral approach to the new measures. But regardless of how the above unfolds, expect the sanctions to be here for a while: at least until 2024, and likely longer.