Trump Finally Punishes Russia. What Now?

But imposing sanctions is one thing. Enforcement is another. That will likely determine the effectiveness of these sanctions and whether this was just a Trump fit of pique against Putin or a meaningful shift in U.S. strategy.  

What These Sanctions Will – And Won’t – Do

The Biden administration, alongside European allies, averaged about one large sanctions package a month, according to a former U.S. official. Still, Russia adapted to these penalties over three years of war, and they have not halted the Kremlin’s ability to attack Ukraine. 

At the same time, the Biden administration tread carefully around restricting Russia’s energy sector, balancing it against domestic political concerns of high gas prices and inflation. In late 2022, the major economies imposed a $60 price cap on Russian oil, an effort to keep the supply of oil stable, while reducing Russian export revenues. But that meant countries like India and China were still purchasing Russian barrels. The U.S. and Europe have targeted Russia’s energy exports in other ways, but the Kremlin has been able to evade sanctions, including through its “shadow fleet” of unregistered tankers that deliver oil around the world. 

Trump’s new sanctions do not fully take effect until November 21 – a full month from when they were announced – which may give Russia time to make a deal or find a workaround. Lukoil said Thursday that it will sell its foreign subsidiaries to Swiss-based firm Gunvor because of the sanctions. Russian billionaire and Putin ally Gennady Timchenko founded Gunvor, though he sold his stake in 2014. According to Meduza, the U.S. Treasury believed that Putin was invested in Gunvor and might have had access to its assets. The U.S. Office of Foreign Assets and Controls (OFAC) will need to approve the sale, but it is a sign that Russia is taking these threats seriously. Putin called the sanctions an “unfriendly act,” and while he admitted they might have economic fallback, he said it would not be significant, according to the Associated Press.

A lot will depend on whether and how Trump enforces these penalties. The administration will need to cajole and threaten buyers of Russian oil to stop. If they do not, the administration will need to follow through with meaningful secondary sanctions. That does not sound like a job particularly suited for the TACO presidency, but if these sanctions are a one-off hit, then they are likely limited in how much they can really squeeze Russia.

A lot hinges on China and India, two of the biggest purchasers of Russian oil. In August, the Trump administration imposed a 50 percent tariff (an additional 25 percent on the already-existing 25 percent) on Indian goods over its purchase of Russian oil, calling Ukraine “Modi’s war” for India’s help in propping up Russia’s oil revenues. Notably, the Trump administration did not target Putin, the one actually doing the war.  So besides driving a wedge with a critical partner in the Indo-Pacific, the tariffs didn’t prevent India from buying 1.5 million barrels of Russian crude in September, and instead punished Indian export industries completely unrelated to oil.

But Trump’s sanctions are different, because, if aggressively implemented, they will increase the risks for any foreign firms doing transactions with Russia’s designated oil companies. This has had  immediate ripples in India and China. India’s top private purchaser of Russian oil said it was doing a “recalibration” of its purchases. India’s share of Russian oil increased dramatically after the war, so it would likely shift back to other sources, including those in the Middle East. As for China, it has stockpiled quite a bit of oil, but Reuters reports that some of China’s biggest refineries have said they will suspend buys from major oil producers. This may just be an initial shock as buyers figure out sanctions workarounds, but those also come at a cost and with additional risks. 

These sanctions do have the potential to bite Russia’s oil revenues, which make up about a quarter of Russia’s budget, according to the Moscow Times. If they are enforced and tightened over time, that could create fallout for Russia’s wider economy. But this is also a more long-term play; it is unlikely to get Russia to the negotiating table immediately.

Still, Ukrainian President Volodymyr Zelenskyy celebrated the sanctions as a “big step.” Zelenskyy also pushed Trump to push Chinese President Xi Jinping into buying less Russian oil during their meeting this week, but it doesn’t seem to have been on Trump’s agenda.

And Trump’s recent saltiness toward Putin hasn’t exactly translated into a newfound enthusiasm for the Ukrainian cause. Zelenskyy met with Trump and top officials in the White House on October 20 with the hope that Washington would supply Ukraine with long-range Tomahawk missiles. The administration would not, and reports suggest the meeting was pretty tense, becoming a “shouting match,” that for better or worse, was not broadcast this time. Trump reportedly repeated Putin’s demand that Zelenskyy agree to a territory “swap,” ceding much of the Donbas in exchange for Russia pulling out for areas they control in the South. Soon after that, Trump announced he was meeting with Putin in Budapest, although a few days later, that summit was off and Trump imposed the sanctions (Putin says the meeting was never official).

While Trump’s change of heart is a symbolic win for Ukraine, it does not yet offer a clear pathway to a ceasefire or a negotiated end to the conflict. As the war nears the four-year mark, Russia continues to bombard Ukraine relentlessly, including targeting energy infrastructure ahead of the winter months. Ukraine is poking back, also attacking Russian energy infrastructure with its drones. Russia has made incremental gains in territory during its offensive this year, but it still has not made a drastic breakthrough, despite high casualties. Yet Ukraine is beleaguered too – its civilians under constant air raids, its military exhausted, suffering from high desertions and unable to recruit. The war Trump promised to stop on “day one” is still raging, and he is not yet closer to a deal than when he took office.