US tariffs on Russia won’t scare Putin

But does it make sense for America to put tariffs on Russian imports? Back in October 2023, it imported goods worth only $314 million from Russia, primarily stuff the US needs: platinum, nitro fertilisers, and radioactive materials for its power stations. A tariff would be a tax on US farms and the nuclear power industry.

So we have to assume that Trump does not have a Russia strategy at this point. What about secondary tariffs? Some European countries such as Hungary still get their oil and gas from Russia. Trump cannot directly tariff Hungarian imports from Russia, but he can slap tariffs on his friend Viktor Orbán. Either way, additional US sanctions on Russia are not likely to scare Vladimir Putin.

There is a lot of naivety about the Russian leader in Western capitals. The Wall Street Journal this week quoted a former State Department official as saying that it was clear the Russian economy was reeling, and that Putin had hoped Trump would give him a reprieve. But one must beware of Western analysts who claim to know what Putin is thinking. Russia’s UN ambassador Vasily Nebenzya has been a source of steady misinformation, as one would expect. But he is spot on with the assertion that “so far, nothing in the signals of the new American administration indicates that this is something that will be of interest to us.”

A peace deal in Ukraine is still possible, though, as Trump has no appetite for funding an ongoing war in Europe. Shifting the burden to the Europeans would be a disaster, something that Putin knows too. European leaders would rather prance around the speaker circuit in Davos than come clean to their electorates about the financial requirements of continued engagement in Ukraine. German Chancellor Olaf Scholz’s main campaign theme ahead of next month’s election is that he does not want to sacrifice pensions for weapons deliveries. Meanwhile, Poland’s Donald Tusk says he wants to fund a rearmament programme through debt. So are we seriously trying to fight a war based on the recovery fund mechanism? Putin has reason to think that the West is bluffing because, well, it is.

The US President’s assertion that the Russian economy is about to collapse is based on a fundamental misunderstanding of how war economies work. They are, of course, not sustainable because they create inflation. The UK’s economy during the Second World War was not sustainable either, nor was it meant to be.

The question for Putin is what costs he will have to incur to achieve the final 25% of his stated goals — the total occupation of four oblasts. At the rate his army advanced last year, that goal would be out of reach for 2026, his declared time horizon. Russia’s President has also been prone to miscalculations. A deal would require that both sides have some realistic assessment of the current scenario, what goals are attainable through continued war, and what they need to bring to the table. Neither side is there yet. Despite what he tells the media, Trump is not focused on this issue for now.

It is likely that the West will have to unfreeze Russian assets for talks to begin, but this is hardly mentioned by politicians or journalists. As we enter the war’s fourth year, the sanctions are becoming less relevant because trade and financial flows have mostly adjusted. Moscow and the West are no longer interdependent, and Ukraine’s allies must realise that their sanctions become more impotent as time goes by.

This is an edited version of an article which originally appeared in the Eurointelligence newsletter.