Russia-US Relations: Back to Confrontation

Russian President Vladimir Putin has ended his six-month unilateral sanctions truce with the United States. In a 30 July TV interview, he announced that the Russian government was ordering the US government to lay off some two-thirds of its diplomats, technical staff, and other employees working in Russia. Starting 1 August, the State Department and related US agencies have been limited to 455 official personnel in Russia, matching the number of Russian government employees in the United States. The US Embassy has also lost access to its recreational compound in Serebryany Bor and warehouses along Dorozhnaya Street in Moscow. The measures were reminiscent of the massive Cold War tit-for-tat expulsions. In 1986, for instance, the Soviet government barred Soviet citizens from working for the US embassy after the Reagan administration expelled 55 Soviet diplomats.
Putin cited the most recent congressional sanctions on Russia as the proximate cause for his decision. The Russian move also follows earlier sanctions on Russia adopted by the departing Obama administration, which expelled dozens of Russian diplomats and seized two Russian diplomatic properties in the United States that Russian intelligence allegedly employed in its campaign of electoral interference in the United States. The Russian countermeasures also come after Putin’s unfruitful first face-to-face meeting with US President Donald Trump at the G-20 summit in Hamburg in early July. Russian officials had pressed hard for such a direct encounter, which followed several rounds of phone calls between the two presidents. While Trump has had direct meetings with numerous other world leaders, he had not yet met with the Russian leader, despite his stated interest in promoting better ties. Russians not unreasonably hoped that a face-to-face meeting would provide an opportunity for a genuine breakthrough in relations. However, the session proved anti-climactic, yielding few results beyond a limited ceasefire in Syria. There is no indication of when the two leaders will meet again.
The last straw for the Kremlin occurred when the White House stopped opposing the latest round of congressional sanctions, despite the law’s constraints on the executive branch’s foreign-policy powers. Congress passed the sanctions with veto-proof bipartisan votes despite Republican majorities in both chambers. The US President can no longer remove sanctions on Russia through executive order alone now that they have been embedded in congressional legislation. The new law gives Congress the right to block presidential proposals regarding the sanctions. Trump has decided to sign the bill rather than risk another setback following the weeks of failed efforts to enact a new health care system.
Putin said that Moscow had a portfolio of possible additional restrictive measures on US-Russian joint activities, but added that he would refrain from employing them for now since new restrictions could harm other countries, including Russia, as well as the United States. Unlike diplomatic staffing levels, which are easily ratcheted up or down, any other countermeasures could be harder to reverse. As with past Russian countermeasures, such as the ban on US adoptions of Russian children, Moscow’s move already looks counterproductive. An immediate impact of the embassy layoffs could be lengthy delays in Russians applying for US visas as well as hundreds of Russians losing their jobs.
Russian policy makers want to improve relations with the United States, but only if US leaders change their policies and thinking to accord better with Russian desires. US leaders similarly expect that only a realignment of Russian policies more in step with Western preferences would lead to an enduring improvement in East-West ties. Until recently, Russian leaders hoped that Trump––who had expressed admiration for Putin, is averse to US unilateralism, distrusts NATO and US foreign commitments, and other views commonly found in Russian discourse—would bring about the changes they wanted to see in Washington. During the past six months, however, Russian expectations of impending major improvements in bilateral ties have disappeared. Trump continues to make friendly remarks about Russia, but his policies regarding key security issues have not changed much from those of the Obama administration. Moscow understands that, despite Trump’s pro-Russian inclinations, he is too weak to resist congressional and bureaucratic opposition in Washington to relaxing US pressure on Russia for the foreseeable future.

Investigations at Home

There are four separate congressional investigations into Russian interference in the 2016 US elections and possible collusion between the Trump election campaign and Russian government representatives. Regarding the former issue, it is widely believed in Washington that the Russian government employed various tools—media messaging, internet trolls, and publicizing various purloined emails through WikiLeaks and other means—to discredit the US electoral process and to secure the defeat of presidential candidate Hillary Clinton. FBI investigations concluded that Russian-linked operators had hacked the Democratic Congressional Campaign Committee and released sensitive and personal information regarding Democratic policymakers and influential politicians. Substantial debate exists in Congress, however, about whether members of the Trump presidential campaign colluded with the Russian government and what impact interference had on the results.
The Senate Intelligence Committee, the Senate Judiciary Subcommittee on Crime and Terrorism, the House Intelligence Committee, and the House Oversight and Government Reform Committee are conducting separate investigations of these issues. The FBI and Justice Department are also conducting investigations. After Trump fired FBI Director James Comey, Assistant Attorney General Rod Rosenstein appointed a special prosecutor, Robert Mueller, to lead the Justice Department’s investigation into the Russian interference issue. The appointment of Mueller, former FBI Director, has for now pre-empted calls to create an independent commission, similar to the 9/11 Commission. The Special Prosecutor’s brief is more expansive than congressional committees. Besides investigating Russian interference in the 2016 election, Mueller is considering Russian connections to the Trump Administration and a possible obstruction of justice by the Administration, including the motivations behind Comey’s controversial firing. In a public hearing of the Senate Intelligence Committee on 8 June, Comey said that Trump unduly pressured him to end the FBI’s investigation of former National Security Advisor Michael Flynn, who resigned following allegations of misleading Vice President Mike Pence regarding his interactions with Russian officials. The FBI is also assessing meetings between Trump’s son-in-law Jared Kushner and Russian lawyers as well as the contacts former campaign staff Paul Manafort and Carter Page had with Russian representatives. Furthermore, Mueller’s investigation is reviewing Trump’s business connections with Russia.

Sanctions Abroad

Even before these investigations have been completed, Congress enacted new sanctions against Russia in July, expanding and embedding into legislation earlier measures initially adopted by the Obama administration following Moscow’s annexation of Crimea in March 2014. These earlier sanctions applied travel bans and asset freezes to certain Russians associated with the events in Ukraine, and prohibited certain Russian banks and major corporations, including state oil companies and arms makers, from doing business with the United States. In December 2016, during Obama’s last weeks in office, the White House applied new sanctions to punish Russia for its interference in the 2016 US elections. These sanctions included the closure of two Russian diplomatic compounds and the expulsion of 35 Russian diplomats involved in the interference.
The latest sanctions penalize entities involved in “undermining cyber-security”; expand prohibitions on US energy cooperation with Russia globally; authorize measures to impede the construction of major Russia gas pipelines and rail shipping lines; impede major transactions with the Russian defence or intelligence agencies; and penalizes Russians who collude in privatization schemes that unjustly benefits officials or their relatives. The new legislation also obliges executive branch agencies to provide Congress with reports on Russian “oligarchs,” illicit financing, Russian influence operations in foreign elections, Russian state controlled or funded media, bans on purchases of the debt or stick of state-run corporations, and an assessment of the potential effect of sanctioning the purchases of Russian state debt and derivatives. Furthermore, the new law provides $250 million for a new “Countering Russian Influence Fund” to protect European election systems from Russian hackers and to support NGOs in exposing corruption, fake news, and other Russian influence operations. This expansion in sanctions and their greater durability (they are of indefinite duration, without a sunset clause, and would require congressional and presidential decisions to remove them) may decrease foreign investment in the Russian economy due to the higher risks and difficulties of doing business in Russia. The President would have to submit a report to Congress justifying any waiver and allow Congress 30 days to block the relief.
The most recent sanctions were adopted because of the consensus in the US intelligence community concerning Russian interference in the 2016 presidential elections, as well as congressional concern over the seeming reluctance of the Trump administration to address the problem. President Trump and his defenders disputed the US ability to attribute any cyber activities to Russian hackers and saw the charges as reflecting Democratic frustrations at losing the elections. Russian officials have expressed similar views, and have also claimed that the Obama administration adopted measures meant to hobble Russian-US relations even after it left office, and thereby thwart Trump’s ability to improve ties and rethink US policies such as NATO’s military build-up near Russia or Western non-recognition of what the Kremlin has called Crimea’s “reunification” with Russia.
The sanctions have aimed to punish Russian military support for pro-Moscow separatists in eastern Ukraine and, ideally, to reverse Moscow’s annexation of Crimea in March 2014 and deter further Russian aggression. The economic restrictions target key sectors of Russia’s economy in the hope that the pressure would entice Putin to reverse its policies in eastern Ukraine. Their success in achieving these goals is debatable. Proponents think they have moderated Russian behaviour over the last two years, while critics note that Moscow has not fundamentally changed its policies towards Ukraine, or its general foreign and defence posture.
Several factors limited the effectiveness of the earlier sanctions. The targeted firms, such as Rosneft and Stroytransgaz, represented less than 10% of the aggregate Russian economy. Moreover, while the sanctions have focused on Russian energy exports, Russia’s non-energy exports, including the agricultural and aerospace sectors, have grown. The Russian government’s fiscal discipline, limits on Russian debt, reduced interest rates, and related measures, such as pursuing new Chinese commercial ties, have dampened the sanctions’ overall effect, which has been further decreased by the recovery of global commodity prices.
The hope that targeting the pocketbooks of the Russian elite close to Putin would spur changes in Russian policies has not panned out. The other important actors in Russian politics and economics have become more dependent on the Putin government’s largesse due to the sanctions closing off alternatives. The Russian counter-sanctions imposed on foreign goods allowed for the development of more domestic businesses, some with close Kremlin ties. The sanctioning of a static list of decision-makers has also failed to reflect the continuous changes in the members of the elite. Politically, the sanctions have not obviously dented Putin’s popularity, at least in the short run. The Russian media either downplays the setbacks or blames the West for them. Survey research indicates that Russians blame the US government rather than their own for the poor state of Russian-US relations.
The sanctions also sought to reduce Russian access to military technology. Indeed, 70% of the technology needed for future military research is imported, with two-thirds of that sum coming from just six countries, all of which participated in the sanctions. But Russian military development has continued through increased reliance on indigenous production and alternative foreign arms suppliers and buyers. Russia remains the second largest arms exporter in the world. Most importantly, Russian foreign policy remains similarly unaffected. Crimea remains occupied, while the Ukrainian crisis has settled into low intensity warfare, with many failed ceasefires and continued Russian military support for the separatists.
One complication is the patent lack of European enthusiasm for the new sanctions. European and other Western governments adopted similar measures alongside earlier US sanctions, thus making US sanctions more effective, even though the sanctions more severely impacted European economies. European-Russian trade is considerably larger than Russia’s trade with the United States. So far many influential European politicians voiced opposition to the new round of US sanctions. There are, on the other hand, certain EU governments who may support, or at least not oppose, the new sanctions. Poland and the Baltic states have resisted the Nord Stream 2 pipeline over worries of entrenching European dependence on Russian gas, while Britain is unlikely to anger the US in light of upcoming trade talks. If European countries do seek to respond, avenues include retaliation through the World Trade Organization, the implementation of the EU “Blocking Statute,” or demands that these new sanctions exclude their companies. However, divisions among European states decrease the possibility of large-scale retaliation against the United States.

Engagement Opportunities, Real and Imagined

For now, the White House and the Kremlin have both accepted that Trump lacks the domestic support to reach a grand bargain that might end the renewed confrontation. Even so, in his TV interview announcing retaliatory measures against the US, Putin cited his interest in pursuing further bilateral cooperation in the fields of counter-terrorism and the non-proliferation of weapons of mass destruction (WMD). The Foreign Ministry official overseeing Russian-US ties, Sergei Ryabkov, echoed Putin’s sentiments, calling for “practical cooperation” between the two countries on countering terrorism, nuclear non-proliferation, and regional security issues. In his TV interview on 30 July, Putin also called for more bilateral cooperation on cyber security, energy, aerospace, and Syria––where he praised the promotion of mutual Russian-US interests, citing the recent establishment of the de-escalation zone.
Progress in these other domains has not been evident. The Russian-US arms control process remains stalled pending completion of the US nuclear reviews later this year, which may recommend that the United States not extend the New START agreement and withdraw from the INF Treaty, which Russia is violating. The Russian-US regional security dialogues regarding Europe and Asia are constrained by the two parties’ differing views regarding NATO and China, respectively. Growing trade and investment with China has allowed Russia to reduce the impact of Western sanctions. Polls have also shown that Russians view China much more favourably than they view the United States. The US Congress and media so strongly ridiculed the Russian-US cyber security agreement reached in Hamburg that President Trump quickly abandoned the project. Russia continues to oppose US missile defences and military threats against North Korea. Despite Trump’s criticism of inadequate European defence spending, he has backed off from earlier suggestions that the United States would not fulfil its security commitments to NATO members. In a recent trip to the Baltics, Vice President Pence reassured listeners that: “Under President Donald Trump, the United States of America rejects any attempt to use force, threats, intimidation, or malign influence in the Baltic states or against any of our treaty allies.” Pence and other Cabinet members have denounced the Russian military occupation of Georgian territory and pledged to assist Ukraine and other non-NATO members to counter Russian aggression.
During the presidential election, Trump called for greater Russian-US cooperation regarding Syria. His campaign advisers argued that the Russian military intervention in Syria was the latest example of why the United States could not ignore Russian policies and military potential when pursuing US goals in the Middle East. With few casualties, the Russian forces saved the Assad government from likely defeat and have made Moscow an indispensable player in the Syrian peace process. In addition, Russian prestige has risen in a region where Western policy looks enfeebled and fickle. While the Obama administration accepted this conclusion with reluctance, the incoming Trump administration looked forward to exploiting Moscow’s deployment in Syria to build a regional Russian-US military partnership against terrorists. The Kremlin has been seeking such a broad-based alliance against terrorism for years, which Moscow hopes would see the West set aside concerns over Ukraine, Russian backing for the Assad government, and other Russian-US disputes. Indeed, during the election, Trump joined Russian officials in expressing doubts about whether any anti-regime fighters, regardless of their formal ties with ISIS or al-Qaeda, should be exempted from the terrorist label and spared from destruction.
But for now, Russian-US cooperation in the Middle East has not extended beyond brokering the limited ceasefire for south-western Syria announced at the G-20 summit. Russia and the United States continue to back different forces in Syria. US complaints that Russia continues to attack US-backed insurgents persist, while Moscow joins Damascus in demanding an end to the Western military operations in Syria. Trump administration officials have said different things over time about the need for regime change in Syria. Their insistence on Assad’s removal was greatest after the government used chemical weapons against defenceless civilians in April, leading to a one-off US missile strike against the base from which the Syrian Air Force used its weapons. But Russian officials have denied that the Syrian military employed chemical weapons and has constantly resisted efforts to replace the Asad regime with a more representative government. The recent US decision to terminate a CIA covert programme for arming Syrian rebels was aimed less at pleasing Moscow than ending an ineffective programme to free resources to support the more effective Kurdish-led groups, despite Turkish opposition. US opposition to the Iranian presence in Syria has grown under Trump, but so have Russian-Iranian ties under Putin.
The Trump administration remains divided over how to address the Ukraine conflict. US officials have publicly backed the Kiev government and justified US sanctions as aimed to moderate Russian behaviour regarding Ukraine. In addition, the Trump administration wants to provide Ukraine and other European countries with more non-Russian energy sources, including now shipping US coal to Ukraine. Nonetheless, the United States under both presidents Obama and Trump have generally deferred to European leadership regarding Ukraine, such as implementation of the Minsk Agreements that uneasily guarantee both Ukrainian sovereignty and regional autonomy. But many in the Pentagon want to provide “lethal defensive weaponry” to the Ukrainian armed forces including antitank missiles. This step would represent an upgrade from the non-lethal aid, such as night-vision gear, that the Pentagon currently provides through the Joint Multinational Training Group – Ukraine, under the US European Command. Supporters of providing lethal aid to Ukraine argue that only increased military pressure would hasten an end to Russian assistance to the separatists. However, several influential European governments believe such aid, which the Obama administration considered but declined to provide, would only intensify the fighting in a situation where Moscow can easily overmatch any escalation, such as by sending regular or special operation forces to defend the separatists.
The State Department, however, has sought to expand the US role in seeking a political solution to the conflict. Proponents see several advantages in this approach. First, resolution of the conflict in Syria, where it looked like the initial Russian-US diplomacy would focus, has proven elusive. Second, despite the latest US sanctions extending well beyond Ukraine to cover Russian foreign electoral interference, Russian corruption, energy policy, and other issues, solving the Ukraine conflict remains a prerequisite for ending Western sanctions on Russia and reconciling Russia and the West. Furthermore, if the Trump administration could negotiate an end to the Ukraine conflict, succeeding where two years of European diplomacy within the Normandy Format have failed, it would re-establish US leadership in Europe. Finally, resolving the Ukraine conflict would give the Trump administration some ammunition for fighting its domestic opponents in Washington who remain sceptical or hostile towards Trump’s efforts to improve relations with Russia.