Trump, Tariffs And Russia: A Very Muddled Policy

It has become something of a fixation in the Donald Trump war chest of options that cowing, discomforting and baffling his various counterparts on the international scene with tariffs is bound to work at every corner. Certainly, when it comes to allies, the potency of such announcements is magnified. Nation states, confusing common interests with friendship, have dreams broken before the call of firm, sober diplomacy.

When it comes to dealing with Russia, though, the matter of tariffs sits oddly. In 2024, US imports of Russian goods came in at US$2.8 billion. What is imported from Russia is certainly of value: radioactive materials indispensable for US power stations, nitro fertilisers, platinum.

All this is modest enough, but Trump is convinced that the threat of economic bruising of his own flavour will work to influence Russia’s war policy against Ukraine. Soon after his inauguration, Trump declared that, were a deal to conclude the Russia-Ukraine war not reached soon, there would be “no other choice but to put high levels of taxes, tariffs and sanctions on anything being sold by Russia to the United States and various other participating countries.”

Instead of being dismissed out of hand as unworkable and ill-reasoned, the old idea that Russia will be brought to heel continues to tease a coterie of dreamers. The UK paper, The Telegraph, is very much with Trump on this, claiming that “redoubling efforts to cut off the revenue Russia generates from oil and gas imports” will drain Russia’s war effort. This could involve, for instance, targeting the now famous shadow fleet ships that continue to distribute oil and gas in global markets undetected. But importantly, those in the European Union would have to pull their weight in weaning themselves off a continued reliance on Russian fossil fuels, a reliance that has tended to make something of a mockery, not just of unity within the bloc, but of the very policy itself.

The reading by the US president on the state of the Russian economy is woefully ignorant about the coarsening of Moscow’s resilience since 2014, when Western governments began to impose a sequence of sanctions across Russian banking, defence, energy, manufacturing, technology and other sectors that eventually reached their peak after February 2022. That same month, US President Joe Biden was unwarrantedly confident that the sanctions regime would “impair [Russia’s] ability to compete in a high-tech 21st century economy.”

The Council of the European Union, also keeping in step with Washington’s financial excoriation of Moscow, understood that these moves would weaken the Russian war machine’s “ability to finance the war and specifically target the political, military and economic elite responsible for the invasion [of Ukraine].”

The immediate response was steady, if necessary, diversification. Alternative markets were sought, with willing participants. Russian oil found itself in Chinese and Indian markets. Alternative trade routes were pursued. Moscow was making use of the Global South with relish, and its war economy did not collapse. GDP grew by 3.6% in 2023 and made a similar performance the following year.

This is not to say that the Russian economy is a model of peak health, and certainly not one to emulate. It has been battered and boosted in equal measure, given heavy injections of stimulus. Alexandra Prokopenko of the Carnegie Russia Eurasia Center describes the country’s economy as “like a marathoner on fiscal steroids – and now those steroids are wearing off.” The real troubles for President Vladimir Putin are more pressing in sustaining not just the war effort but domestic infrastructure and social programs. The juggling act, so far fortuitously favourable to him, is not a sustainable venture.

The broader lesson here is that economic weapons that seek to strangle, coerce and direct a nation state into action are blunt, inconsistent in their application and often counterproductive. The most telling response from the target state is adapting and adjusting to disruption, and Russia shows better signs than most in doing so. Shocks are eventually absorbed.

Furthermore, it seems that Trump’s threats are playing a splendidly inert role in the Kremlin. One public statement made by Russia’s deputy ambassador to the United Nations, Dmitry Polyanskiy, did suggest that Russia was merely waiting for something more concrete, exempting the president from any lashing words otherwise used for his predecessor. “We have to see what does the ‘deal’ mean in President Trump’s understanding,” the official reflected. “He is not responsible for what the US has been doing in Ukraine since 2014, making it ‘anti-Russia’ and preparing for the war with us, but it is in his power now to stop this malicious policy.”

There may be something in what Polyanskiy says, but in the meantime, Trump will focus on inflicting the most concerted damage that any indiscriminate tariff regimes can do: against countries with which the United States does extensive business with. Mexico and Canada have far more reason to worry than Russia, as do other US allies.

Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He currently lectures at RMIT University. Email: bkampmark@gmail.com

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