US President Donald Trump has announced new weapons for Ukraine and threatened to hit Russian export buyers that the USIA agrees to the peace deal in 50 days.
On Monday, shoulder to shoulder with NATO general secretary Mark Rutte at the Oval Office, Trump told reporters that he was disappointed with Russian President Vladimir Putin, which he is sending “billions of dollars”, including weapons in Ukraine, in the weapons, patriotic air defense missiles, which have requested to protect their sittings from the Russian Air Strike.
Additionally, the US President has threatened Moscow with secondary sanctions, stating that “if we have no deal in 50 days, it is very simple, and they will be at 100%.”
A White House official said that Trump was referring to the target sanctions for the third country to buy Russian exports.
Search secondary sanctions are widely seen as a possibility of a more serious impact on Russia’s economy, allowing Russia to sell oil to buyers such as China and India than the measures already imposed.
Russia’s economy was facing challenging circumstances
For more than three years, Western observers have surprised the real status of Russia’s economy. On time, it has appeared in the stress of restrictions – on other, it has shown unexpected power.
In 2023, Russia’s GDP (GDP) increased 4.1%and in 2024, 4.3%.
However, the speed, due to a change in a war economy on a large scale, now seems to be decreasing. Many economists hope that Russia’s growth will be cut into half, which will fall to just 2%.
Even the Russian Central Bank is expecting a recession, the Russian state news agency Interfax recently stated, between 1% and 2% growth for 2025, its low forecast and clinging between 0.5% next year.
The German Munich -based IFO institute is even more pessimistic, predicting that after a slight increase in 2025, Russia’s economy will contract up to 0.8% in 2026.
A major drag is Russia’s extremely high interest rate, currently 21%, which is closing private investment. The auto industry and mechanical engineering sectors are particularly difficult hits, followed by construction and steel.
At the same time, about 40% of the Russian currency has surprised the man since the beginning of the year.
According to Vasili Astrorow, a Russian expert at the Vienna Institute for International Economic Studies (Wiiw), Ruble appreciation was largely reacted to US President Donald Trump’s concurrent Russia Russia earlier this year.
“When President Trump took over, he said that he adopted a radical different approach to his predecessor, who compared to Biden,” Astrove told DW. Trump had closely collaborated and even lost or rejected US sanctions, triggering “enthusiasm” on Russian financial markets, “quite appreciating with both shares and rubles,” Astrorow said.
Will enthusiasm disappear on strict restrictions?
In November 2024, the US tightened sanctions on Gazprumbank, a major Russian bank belonging to the state-rummed energy giant, excluding it from the US financial system. The move freeze its American property and cut trade with American firms. Gazprombank is central for gas payment and funding of military-related projects.
While the European Union had left the Gazprumbank from restrictions by the end of 2024 to allow continuous payment to Russian gas, the US step had an immediate effect. Ruble lost a quarter of its value against the dollar, and the stock market specificly dropped in financial and energy sectors.
It was not surprising that, that Russian policy makers paid attention to Donald Trump after a Lat-April meeting with Ukrainian President Volodimir Zelanski in Rome, indicating that it would “be to deal” [Putin] apart. ,
American Senate prepares new approval law
The threat of secondary sanctions by Trump refers to the punishment imposed on third countries, companies, or individuals who are trading with Russia.
Trump’s associate Senator Lindsay Graham and a bilateral group of American senators, meanwhile, have prepared a law to expand sanctions to any country importing Russian energy products.
The remedy was sidelined among other priorities in the Congress in recent weeks and as the White House has changed the measure that would give the US President more flexibility when implemented restrictions.
But the prime leader of the Senate John Thyun said last week that the GOP leaders made “adequate progress” on the law and estimated that the measure could be prepared to consider the Senate floor as this task period, which ends on 1 August.
Astrove says that Graham’s new Russia ban bill can mainly target China and India.
“China is now Russia’s highest importing trading partner, about 40% of its imports and 30% of its exports in 2024. Important imports for the military industry have been rooted through China and Hong Kong,” Astrorow said.
India played an important role in advancing the Russian economy, said, as it combines with China, it absorbs “more than half of Russia’s total oil exports”.
While China was expected to refuse to be involved in the Western sanctions and India’s neutrality was not surprised, the unexpected player in the game’s game was Turkey, he said, the country rejected the restrictions despite being “part of NATO members and a customs association”.
Russia’s payment channels face shutdown
Under President Biden, secondary sanctions were strictly implemented, and violations were punished. Astrorow noted that specific Chinese and Turkish banks, which accepted payment from Russia, came under heavy pressure from the bid administration.
The Trump administration, however, changed the policy, for example, by dissatisfaction within the Ministry of Finance, which is responsible for targeting the property of the Russian elite class and by “mass stack” to the enforcement of secondary restrictions.
Astrorow feels that it is currently “difficult to predict” how much the new secondary sanctions will affect the economic partners of Russia.
One of the reasons for this was recently reported by The Reuters News Agency, stating that major Russian banks established a “The China Track” dubbed Netting Payment System for transactions with China, aimed at reducing their visibility for Western regulators and reducing the risk of secondary restrictions.
Banking sources said the Reuters were on for some time and were used by many approved Russian banks. According to Reuters, to trade with Russia and “no major shocks had yet been faced,” depended on middlemen in countries.
Alexander Shokhin said, “I don’t deny that Chinese partners will no longer fear secondary sanctions.”
This article was original in German. It was updated after Donald Trump’s threat to impose secondary restrictions on Moscow on 14 July.
