Commentary
Dmitri Trenin
{
"authors": [
"Dmitri Trenin"
],
"type": "commentary",
"centerAffiliationAll": "",
"centers": [
"Carnegie Endowment for International Peace",
"Carnegie Russia Eurasia Center"
],
"collections": [],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Russia Eurasia Center",
"programAffiliation": "",
"programs": [],
"projects": [],
"regions": [
"North America",
"United States",
"Russia",
"Eastern Europe",
"Ukraine",
"Western Europe"
],
"topics": [
"Political Reform",
"Economy",
"Trade",
"Climate Change",
"Foreign Policy"
]
}
Source: Getty
Commentary
Solving the Russia Problem
After the end of the Cold War, the West neglected the task of solving the “Russia problem” through integration. Trying to solve it now through economic warfare is not going to work.
Published on Apr 28, 2014
U.S. President Barack Obama has led the other G7 leaders to impose new sanctions on Russia. The idea of steadily tightening the noose around the Russian economy is being consistently implemented. So far, the result has been more of a demonstration of the sanctions' capacity to hurt than a real pain. Yet, the ruble's depreciation by around 10 percent since January is a reality: the Russian stock market has plummeted, the capital outflow has reached 70 billion dollars in the first quarter, Russia's growth this year may lose no less than two percentage points, and become negative, and Russia's credit rating has just been downgraded to BBB-, with a negative forecast.
We are clearly at the very beginning of the sanctions era. President Vladimir Putin's meeting with his principal economic advisers last week was a serious discussion of the worsening international economic environment and the ways of handling it. Putin is given a range of options, from pursuing structural reform to embracing autarky. The former should be preferable, but it would run against powerful vested interests. The latter is psychologically more comfortable, but its likely effect will be worse than all the sanctions combined. It looks as if Putin has not yet made up his mind, and hopes to weather the remainder of Obama's second term using the reserves Russia has accumulated while trying to torpedo U.S. economic restrictions.
There is palpable resistance on the part of various Western business interests—from German manufacturers to U.S. big oil—against ratcheting up sanctions. The Obama administration's effort to talk Russia down is countered by the Kremlin's outreach to the CEOs of the companies that are doing well in Russia. The U.S. drive for Europe's independence from Russian gas is followed by Gazprom's calculations of how much more the Europeans will have to pay for their gas imports from the United States in the case of such exports will become legally and logistically possible. This competition will continue, but in the end the United States will probably get much of what it wants from its European and Asian allies.
What is less clear, however, is what these sanctions will actually achieve. Making Putin back down and concede defeat in Ukraine is improbable. Driving wedges between the Russian leader and his close associates is equally hopeless. The Russian liberal opposition, already marginalized, will hardly get a shot in the arm thanks to the sanctions. As to the bulk of the Russian people, their instinctive reaction to massive outside pressure against their country is more likely to be a patriotic surge rather than a regime change. The Russian government will now have an excellent reason to explain away the coming economic hardships: U.S. sanctions.
After the end of the Cold War, the West neglected the task of solving the “Russia problem” through integration. Trying to solve it now through economic warfare is not going to work.
About the Author
Dmitri Trenin
Former Director, Carnegie Moscow Center
Trenin was director of the Carnegie Moscow Center from 2008 to early 2022.
- Mapping Russia’s New Approach to the Post-Soviet Space
- What a Week of Talks Between Russia and the West RevealedCommentary
Dmitri Trenin
Recent Work
Political ReformEconomyTradeClimate ChangeForeign PolicyNorth AmericaUnited StatesRussiaEastern EuropeUkraineWestern Europe
Carnegie India does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie India
- What Could a Reciprocal Defense Procurement Agreement Do for U.S.-India Ties?Article
India and the United States are close to concluding a Reciprocal Defense Procurement Agreement (RDPA) that will allow firms from the two countries to sell to each other’s defense establishments more easily. While this may not remedy the specific grievances both sides may have regarding larger bilateral issues, an RDPA could restore some momentum, following the trade deal announcement.
Konark Bhandari
- India Signs the Pax Silica—A Counter to Pax Sinica?Commentary
On the last day of the India AI Impact Summit, India signed Pax Silica, a U.S.-led declaration seemingly focused on semiconductors. While India’s accession to the same was not entirely unforeseen, becoming a signatory nation this quickly was not on the cards either.
Konark Bhandari
- The Impact of U.S. Sanctions and Tariffs on India’s Russian Oil ImportsCommentary
This piece examines India’s response to U.S. sanctions and tariffs, specifically assessing the immediate market consequences, such as alterations in import costs, and the broader strategic implications for India’s energy security and foreign policy orientation.
Vrinda Sahai
- India-China Economic Ties: Determinants and PossibilitiesPaper
This paper examines the evolution of India-China economic ties from 2005 to 2025. It explores the impact of global events, bilateral political ties, and domestic policies on distinct spheres of the economic relationship.
Santosh Pai
- NISAR Soars While India-U.S. Tariff Tensions SimmerCommentary
On July 30, 2025, the United States announced 25 percent tariffs on Indian goods. While diplomatic tensions simmered on the trade front, a cosmic calm prevailed at the Sriharikota launch range. Officials from NASA and ISRO were preparing to launch an engineering marvel into space—the NASA-ISRO Synthetic Aperture Radar (NISAR), marking a significant milestone in the India-U.S. bilateral partnership.
Tejas Bharadwaj
