Russia’s withering economy is a tricky place to do deals—even for Trump
Subscribe to enjoy similar stories. President Trump has said he wants to see major economic deals with Moscow and is in advanced talks to put some together. But how viable a partner is Vladimir Putin’s Russia, its economy weakened by years of Western sanctions, its population falling and the prospect of aggressive state intervention rarely far away? Optimists in the White House point toward a new era of cooperation between the two countries if a deal can be made to end the war in Ukraine.
Even if Europe isn’t fully on board with a settlement, it might still offer opportunities, especially in the extraction of minerals critical to the tech industry or oil and gas, the thinking goes. But once a magnet for foreign businesses, today’s Russia isn’t offering a strong investment case. Despite its resilience during the Ukraine war so far, its resource-dependent economy is now slowing under the weight of runaway inflation, sky-high interest rates and Western sanctions.
Even if the U.S. were to lift some sanctions, Europe is unlikely to follow suit, leaving Russia a compliance nightmare for international companies. An unpredictable business environment in Russia, where asset seizures by the state have become the norm, would also deter foreign investors.
The Russian economy, meanwhile, has become critically dependent on China, and any returning Western company would face stiff competition with entrenched Chinese players. “There will be no economic normalization between the U.S. and Russia for years to come," said Maria Shagina, senior fellow focusing on economic sanctions at the International Institute for Strategic Studies, a think tank.
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