Trump and Putin express interest in reviving US-Russia trade after the Ukraine war, but sanctions and economic shifts in Russia complicate the prospect of renewed cooperation.
After more than three years of conflict in Ukraine, Donald Trump and Vladimir Putin have indicated their willingness to resume trade relations between the United States and Russia once the war concludes. However, profound changes in Russia’s business environment and extensive Western sanctions pose significant challenges to this process.
Large-Scale Withdrawal of Foreign Companies from Russia After the War Began
Since the onset of the war in February 2022, numerous major foreign companies, particularly American giants such as Coca-Cola, Nike, Starbucks, ExxonMobil, and Ford, exited the Russian market. This massive withdrawal has had a substantial impact on Russia’s economy and transformed the business landscape. Companies that had invested in Russia for years were compelled to halt operations or sell their assets due to sanctions and political pressures.
Trump and Putin’s Willingness to Revive Trade Relations
After over three years, Donald Trump has expressed hope that following the war’s end, US-Russia trade relations can return to their previous state. Vladimir Putin, likewise, has emphasized that foreign companies may return under specific conditions and has signaled willingness to enhance cooperation. Trump stated after a phone call with Putin, “Russia wants to engage in large-scale trade with the United States once this catastrophic bloodbath is over, and I agree.”
Shift in Tone and Ground Realities
However, following intense drone and missile attacks on Kyiv, Trump changed his tone, accusing Putin of having “gone absolutely crazy” and threatening new sanctions. At the same time, Putin’s recent warnings to Western companies against reclaiming their former stakes reflect the complex and insecure environment for businesses in Russia. These developments highlight that the return of foreign companies to Russia will never be straightforward.
Structural Changes in Russia’s Business Environment
Since the war began, Russia’s business environment has undergone profound changes. New laws place foreign companies in precarious positions, making reinvestment in this market highly risky. Russia classifies countries supporting Ukraine as “unfriendly states” and has imposed stringent restrictions on companies from over 50 countries. These restrictions include limitations on withdrawing capital and equipment, as well as granting the government authority to seize companies.
Government Seizure of Companies and Assets
Companies that left Russia were forced to sell their assets at significantly reduced prices or abandon them altogether. Kremlin-affiliated groups acquired these assets at bargain prices. Additionally, presidential decrees issued in 2023 enabled the government to take control of major firms such as Finland’s Fortum, Germany’s Unipro, France’s Danone, and Denmark’s Carlsberg.
The Outlook for Corporate Return: Reality or Wishful Thinking?
Even if Western sanctions are lifted and the US is removed from the “unfriendly states” list, the extensive losses experienced by foreign investors will be difficult to recover. So far, no major company has declared an intention to return to the Russian market. Experts argue that these discussions remain largely political rhetoric, while economic and political realities present substantial barriers to investors’ return.
Chris Weafer, CEO of Macro-Advisory Ltd, commented, “All of this remains at the level of political narrative with no tangible indication of companies preparing to come back.”
Conclusion: The Challenging Road to Reviving Trade Relations
Given the political complexities, widespread international sanctions, and structural changes within Russia’s market, restoring US-Russia trade relations to their pre-war levels will be a lengthy, risky, and difficult process. Achieving this goal requires fundamental changes in Russia’s domestic policies as well as a reduction in international political tensions.
