Trump declines to Sanction Russia, Spurring Speculation about Putin Hold

By Juan Cole | (Informed Comment) | – –

The Trump administration has refused to implement new sanctions on the Russian defense sector, as mandated by Congress’s “Countering America’s Adversaries Through Sanctions Act,” or CAATSA. Congress passed the bill last year and it was reluctantly finally signed by Trump in August. It is vaguely worded enough, however, that Trump’s White House attorneys appear to have concluded that it need not actually be implemented.

The question of whether US sanctions on Russia, or further such sanctions, are wise or justified or even legal can be argued. But Trump’s actions in this case are flatfooted and will give rise to further suspicions that Putin has some sort of hold over him. He could have declined to sign CAATSA on any number of grounds. Or he could have implemented it half-heartedly. Signing it and then not implementing it is the worst of all possible worlds politically.

The US already has sanctions on Russia, but the new law sought to increase them and to identify oligarchs close to President Vladimir Putin. Putin is known to especially dislike the US sanctions on his billionaire cronies, whose wealth he has often helped create through state mechanisms. Putin has long since crushed those oligarchs who were independent of him.

The Department of the Treasury did issue the list of oligarchs, but Trump has declined to place further sanctions on third parties doing business with them, as Congress mandated. The earlier round of sanctions came out of Congressional GOP distress at the unilateral Russian annexation of Crimea from the Ukraine and its support for ethnic Russian separatists in east Ukraine.

Secretary of State Rex Tillerson announced his non-compliance with the Congressional law, saying that the earlier round of sanctions had done billions of dollars of damage to the Russian arms industry, and that it was best to let that process of disruption continue rather than introducing new uncertainties, given that arms contracting is a multi-year endeavor.

If you could not understand how Tillerson’s argument makes any sense, join the club–it seems nonsensical to yours truly, as well.

But you wonder if he let the cat out of the bag. Is the underlying motivation for these unilateral US sanctions on Russia now simply to give Lockheed Martin, Boeing and other US arms manufacturers an advantage over their Russian counterparts?

Meanwhile, BBC Monitoring translates some of the Russian concerns about the whole episode, from yesterday’s papers before Trump announced his non-compliance.

Russian billionaire Alexei Mordashov said at Davos that US sanctions would not directly affect the general business climate, since they are targeted at the defense sector. He admitted, however, that they increase uncertainty, which is bad for business.

Yevsey Gurvich at the state-owned Rossiyskaya Gazeta said that US sanctions have an up side, in that they will bring Russian investments back to Russia. The government is offering an amnesty for repatriating capital this spring, and the US congress may contribute to its success by increasing the riskiness of foreign investment.

Gee, Congress is Making Russia Great Again!

Analyst Alan Karashkin at the Russian Business Daily admitted that Western banks and financiers will be affected by the US Treasury Department’s listing of “oligarchs.”

Natalia Orlova feared that the US move might increase the volatility of the rouble exchange rate.

So a lot of Russian analysts see a negative impact from the mere threat of further US sanctions contained in CAATSA, which they see as creating a negative business environment for Russian investments abroad.

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Bonus video:

Wochit Politics: “Trump Administration Avoids Applying New Russia Sanctions”

10 Responses

  1. Sanctions are frequently double-edged, and really shouldn’t be applied unless they can be guaranteed to produce total capitulation more or less immediately. The Spanish Ambassador to the Court of Elizabeth I advised her: If you come upon your enemy floundering in a river up to his waist, extend your hand and pull him out, but if he is up to his neck, keep your foot firmly on his head.

  2. And this while countless millions starve.

    Europe has suffered 21 billion euros in lost exports as a result of sanctions against Russia over Ukraine, Spain’s foreign minister said today as he met his counterparts to discuss further measures.
     
    “Sanctions have had a heavy cost for us all, the EU has so far lost 21 billion euros ($23.7 billion). In Spain we have been badly hit in terms of agriculture and tourism,” said Jose Manuel Garcia-Margallo, giving the first figure of its kind for the EU. 

    link to ndtv.com

    Russian authorities have destroyed 19,000 tons of food since 2014, in compliance with an import ban on certain food products from Western countries. 
    The ban was introduced in August 2014 in retaliation to Western sanctions imposed on Russia following its annexation of the Crimean peninsula. Since then, the country has destroyed hundreds of tons of fruits and vegetables, cheeses and livestock products.
    link to themoscowtimes.com

  3. You might be cheering for Russia to get away with it, but then what message does it send when the USA treats Russian businesses radically differently than Iranian businesses?

  4. As a European that has lived in the USA for many years, I am somewhat surprised by this prissy, arrogant attitude of the USA towards the rest of the world, an attitude based on the conviction that the USA is somehow better than the other countries and has therefore the right to “punish” them, if to “guide” them to do better.
    The USA criticized Russia because of her corruption, but I am hard press to thinking of developed country more corrupt than the USA. What the USA calls lobby, the Europeans call corruption. In the USA you can buy and sell Senators and Congressmen, judges and laws.
    The USA criticizes Russia as not being a democracy. But is the USA a democracy? A recent study proved that Congress ignored the citizens’ demands to promote those of corporations. The USA has two parties, almost identical. There is really no choice. In the USA only the wealthy or those who are supported by wealth can become politicians. Voting participation is abysmally low, but, in several Southern states, electors — particularly among the blacks — are discouraged from participating.
    The USA criticized Russia for interfering in other countries’ affairs (including the USA itself, though, to my knowledge, no proof has emerged of that being the case). There is no other country on earth which has meddled, sometimes with catastrophic result, in the affairs of other countries.
    Perhaps the politicians, the media, and the intellectuals of the USA should stop judging, sanctioning, invading, sabotaging, invading and destabilizing other countries and give their undivided attention to making the USA a better place than it is.

    • Great Power states have always interfered with satellites and unaligned small states, playing a delicate game to not trigger an event that brings in their major rivals. You Europeans have just forgotten what cynical bastards your grandfathers were like before the US and USSR simplified (and significantly improved) the infinite conflicts of the continent. We all want to believe in sovereign equality, but it was further from existing before the US hegemony than during it.

      But in Great Power conflict, what you don’t do is direct a coup against another Great Power’s internal government. That would have been casus belli in the Europe of 1792, or 1914, or 1939. Do you understand that Russia possibly collaborated with the Republican Party, not just Trump? That its hackers attacked voter databases of Democratic-majority cities and thus created a potential excuse for cynical Republicans to in turn interfere in counting the votes?

      The very act of putting Trump in power in the US is equivalent to the US rewarding not the hapless Yeltsin, but actually carrying out vote fraud to put in charge the evil fascist Zhirinovsky. Now you know why we wouldn’t do that, Zhirinovsky was a bigoted lunatic who was bound to make a mess and upset the regional status quo. Well, what is different about Trump? What’s different is that Trump is vastly more influential to legions of White supremacists and fascists around the world, and he’s got his finger on the biggest button. All of that was foreseeable, and Putin decided that the chaos would be profitable.

      No matter how much you dislike America, its history as a democratic republic was crucial to legitimizing the idea of such government in the larger world, as John Stuart Mill explained about the outcome of the American Civil War. Guess what happens when you help Trump – and the KfD and Victor Orban and Marine LePen – pose strongman rule as an actual replacement for democracy worldwide?

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