Cutting the Knot: A Valuable US-EU Collaboration on Sanctions Against Russia
Trump Contemplates Prolonged Sanctions Imposition on Putin
By Lea Verstl
The EU's latest attempt to tighten the screws on Russia's economy through an oil price cap might just hit its mark, but it needs the green light from US President Trump. A stroke of luck could come from Trump, who might see lower oil prices as an incentive to hasten Russia's withdrawal from Ukraine. Yet, the question remains: is volatile U.S. President Trump prepared to exert pressure on Russian President Vladimir Putin?
At the heart of the EU's 18th sanctions package lies a proposal to lessen the oil price cap from $60 to $45 per barrel. This package, set to be discussed with G7 allies, including Mr. Trump, offers hope that the US President may be persuaded to cooperate. The strategic move by the EU seeks to cap the price Russia can fetch, limiting its revenue for funding the ongoing conflict in Ukraine.
Politically speaking, Trump holds the advantage in this dance. The US can apply secondary sanctions, potentially shedding light on companies dealing with Russia, making international transactions a risky business for Moscow. Due to legal concerns, the EU isn't allowed to employ such measures, but the risk of running afoul of international law and other nations' sovereignty looms large.
The Elephant in the Room: US Sanctions and Loss of Trade Partners
Bearing secondary sanctions in mind, more than 80 out of 100 US Senators signed a bill drafted by Republican Senator Lindsey Graham. According to US media, Trump isn't entirely opposed but would rather soften the law, as the implications for US business could be severe. The tariff provisions in the current draft, running up to 500%, would impact US trade relations with India and China, the major buyers of Russian oil, as well as some EU countries still procuring Russian gas.
Nevertheless, Graham's proposal threatens to sever US commercial ties with these nations, potentially thwarting ongoing trade agreements and current negotiations, such as the one between the US and China concerning mutual export restrictions.
Alexandra Prokopenko, an expert on Russian economic policy at the Carnegie Endowment for International Peace, expressed a similar sentiment: "The force of secondary sanctions against Indian or Chinese companies could jeopardize all the positive outcomes reached on a bilateral level."
A New Chapter in Trade: US and China Meeting at the Crossroads
Coinciding with such delicate trade negotiations, the US and China have agreed on a framework for regulating tariffs and resources. The political landscape seems to be shifting, with unofficial representatives from both sides reportedly making progress in their discussions.
A Wildcard: Orbán's Veto and Trump's Influence
In the meantime, the EU is left to enforce primary sanctions. The proposed 18th package includes a reduced oil price cap, sanctions against additional vessels in Russia's shadow fleet, further banks, and even a ban on the Nord Stream pipelines. Despite Germany's rejection of resuming gas transit post-conflict, there is speculation that renewed gas supplies might serve as part of a peace agreement between the US and Russia.
If these rumors hold water, Trump might have a say in the matter. Brussels' decisions will be made independently, but Trump could play a trump card: Hungarian Prime Minister Viktor Orbán has close ties with Trump, having played golf together at Mar-a-Lago. In January, Orbán threatened a veto against the extension of the existing EU sanctions, hinting at Trump's return to the White House.
However, Orbán's ties with Putin are equally strong, as demonstrated by their public displays of camaraderie. Orbán and fellow Russia ally, Slovak Prime Minister Robert Fico, consistently threaten to obstruct decisions on new sanctions packages. Reports suggest that Orbán acts upon Trump's instructions in this regard, leading some to wonder if the whole sanctions package could unravel due to Trump's disapproval.
In Conclusion: A Dance of Power in the EU-US-Russia Trilogy
In essence, the US's active participation in EU sanctions could significantly increase the potency of economic measures against Russia. With the combined approach, both entities could yield stronger control over the global oil market, widen the scope of secondary sanctions affecting non-Russian businesses, and improve enforcement mechanisms, making it more challenging for Russia to evade punishment.
- The proposed EU sanctions against Russia, including a reduced oil price cap, rely on cooperation from US President Trump, who possesses the potential to exert pressure on Russian President Vladimir Putin through secondary sanctions.
- The dance of power among the EU, US, and Russia is influenced by international politics, as the US-EU collaboration on sanctions against Russia could impact global trade relationships, particularly in light of ongoing negotiations between the US and China regarding tariffs and resources.
