Russia is one of the few countries not directly affected by the new U.S. trade tariffs. The effects on its economy, however, are still profound, while the political consequences are open to interpretation.
Illustration: Anton Petrus via Getty Images
Energy revenues
The revenues from oil and gas exports have been declining since the start of the year, and the current drop in oil prices is expected to lead to a further and deeper contraction (Kommersant, April 4). Moscow’s stock market experienced a sharp plunge, and various supply chains, already warped and lengthened by sanctions, have been further disrupted (RBC, April 3; The Moscow Times, April 4). The decision by Saudi Arabia and other OPEC+ (Organization of the Petroleum Exporting Countries) states to relax oil production quotas has led to a diminished influence for this cartel in global energy markets (The Moscow Times, April 4).
Sabotage of peace-making efforts
This turmoil could have made it easier for Russian President Vladimir Putin to camouflage his sabotage of the U.S.-led efforts at peace-making in his war against Ukraine, but in fact, the pressure from many quarters remains intense.
Seeking to explain away his intransigence, Putin dispatched his most amicable negotiator, Kirill Dmitriev, to Washington. He secured meetings with several influential officials, including U.S. Secretary of State Marco Rubio (Izvestiya, April 4). This youthful, business-minded envoy had no authority to soften Putin’s rigid conditions for a ceasefire, but attempted to explore other avenues for possible cooperation, ranging from cooperation in the Arctic to the exploration of rare earth elements (Svoboda.org, April 4). The incentives he was able to offer were not particularly tempting, while Putin’s procrastination appears to be leading to harsher sanctions against Russian oil exports (Novaya gazeta Europe, April 1). Still, Dmitriev may count Rubio’s assertion that Russia has “several weeks, not months” to demonstrate readiness to make a peace deal as an achievement (Meduza, April 4).
Relentless attacks in Ukraine
This timeframe provides Putin with an opportunity to launch another offensive operation, reinforcing his claim to control the strategic initiative (Republic.ru, April 4). Presently, Russia’s relentless attacks are not yielding any territorial gains, despite heavy losses (The Insider, April 4).
The need to replenish the dwindling “big battalions” compelled Putin to set the target figure for the spring draft at a record high of 160,000 conscripts, despite the demographic situation in Russia continuing to deteriorate (Novye Izvestiya, February 22; Interfax, March 31). A new offensive would require freshly trained reserves rather than raw draftees and can only succeed if the Western aid to Ukraine is curtailed (Nezavisimaya gazeta, March 30).
Western solidarity
Putin may presume that the trade war would deepen the already loud discord in the Western alliance, but Rubio assured the gathering of foreign ministers in Brussels that Trump planned to partake in the North Atlantic Treaty Organization (NATO) summit in The Hague in late June (Novaya gazeta Europe, March 5).
The demonstration of Western solidarity included a joint statement on Russia’s responsibility for delaying and breaking the peace talks. It additionally reiterated determination to increase expenditures on collective security (Kommersant, April 4). Andrii Sybiha, Ukraine’s Foreign Minister, praised the new commitments of support from many European states following the NATO-Ukraine Council session on April 3 (NV.ua, April 4).
The looming new recession, however, casts doubts on the ability of key European states to sustain this support and to invest simultaneously in their own defense capabilities (RBC, March 4). Moscow is attempting to capitalize on these doubts by amplifying its objections to a European peace-ensuring force in Ukraine and by targeting Germany with warnings against the “re-militarization” proposed by the yet-to-be-formed government (RIAC, April 4; Izvestiya, April 5).
The meeting of EU defense ministers in Warsaw last week, with Ukrainian Defense Minister Rustem Umerov in attendance, nevertheless set realistic guidelines for making Ukraine a major contributor rather than a costly appendage to the European security system (Krym-Realii, April 3).
High-level political summitry
The surge of high-level political summitry in Europe, which consistently involves Ukraine, exposes many security deficiencies and demands decisions that appear too tough for many populist politicians (Re: Russia, April 2).
Moscow pundits’ attempts to downplay the consolidation of European unity and portray the multiple meetings as mere empty talk amount to self-deception and denial of the fiasco in the habitual discourse on the “Anglo-Saxon” hostility (Nezavisimaya gazeta, April 2; TopWar.ru, April 6).
The new Moscow intrigues aimed at courting Trump and criticizing the European “war party” run counter to the People’s Republic of China’s (PRC) attempts to adopt a rigid confrontational stance against the United States, while cultivating ties with the European Union (Rossiiskaya gazeta, April 3).
Foreign Minister Wang Yi’s visit to Moscow
Besides the usual praise of the unique warmth of bilateral relations, there was very little information on PRC Foreign Minister Wang Yi’s recent three-day long visit to Moscow (Vedomosti, April 2). The talks were allegedly focused on preparations for PRC President Xi Jinping’s attendance at Russia’s Victory Day parade on Red Square, but such occasions are typically long on pomp and short on substance, requiring discussions on protocol rather than substantive issues (RIA Novosti, April 1).
Global economic turmoil is a crucial concern for Beijing, and the value of a strategic partnership with Moscow in this context is far from major (Valdai club, March 28; RIAC, April 3). Wang reiterated the PRC’s neutral attitude to the U.S.-driven peace efforts, but the PRC is well aware of Putin’s demands. Beijing has expressed a preference for involving other actors, including the European Union, in the negotiations, indicating a perception that Trump’s deal-making efforts may not work (Svoboda.org, March 6). Beijing may then advance a revised version of its “peace plan,” expecting support from Europe and asserting its pivotal rather than supporting role.
A fast-moving global disorder
Moscow finds itself at the periphery of high-intensity political interactions focused on a geo-economic power struggle, but it is not spared the consequences of escalating tensions and multiple disruptions to the global economic order. The Russian war machine is poised to experience numerous indirect effects, and the economic deformities caused by the prolonged war of attrition are likely to be exacerbated.
Putin’s determination to keep the high-casualty hostilities going is clashing not only with Trump’s desire to stop the fighting but also with the broad international consensus on the imperative to bring the war to an end and with the growing war tiredness in Russia. He may persist with the war-making course, but his calculus of time available for withstanding various pressures may be suddenly proven wrong by the fast-moving global disorder.
- Pavel K Baev is a Research Professor at PRIO
- This text is also published by Eurasia Daily Monitor