The United States Government has deemed Russia responsible for violating international law by using chemical weapons against its own nationals in the UK. With this declaration, the US has unleashed, and is threatening further sanctions against Russia. How will this affect the US-Russia dynamic?
Previous sanctions
Since the annexation of Crimea and separatists fighting in Ukraine in 2014, some Western nations imposed an array of sanctions on Russia and increased military activities along NATO Eastern border. The timing coincided with a large drop in oil and gas prices (Russia’s main export). The Russian currency collapsed and a financial crash ensued. In January 2014, 1 USD was equivalent to 24 RUB; in January 2015 the rate peaked at 68 RUB.
Even though Russia annexed Crimea and faced a financial and currency collapse, President Putin’s approval ratings spiked and remained consistently high. In December 2013 his ratings stood at 65% and by August 2014 he had reached 85%. Popular belief in this period held the US and allies accountable for their economic difficulties. The Russians rallied around their leader and their country, which they saw as being economically attacked (through sanctions) and threatened (because of NATO border exercises) by the West.
Skripal incident and repercussions
The Skripal incident on 4 March 2018, a suspected chemical weapon assassination attempt by Russia on one of its own nationals (a former Russian spy and his daughter) albeit denied by the Russian Government, has attracted a fresh round of sanctions. The motives and timing are not yet widely understood, although historically, such attacks tend to carry a message intended for a selected audience. It is likely not coincidental that this incident occurred shortly before the widely watched 18 March Russian presidential elections and the June–July FIFA World Cup. The United Kingdom’s immediate response, also mirrored by its allies and then the Russians in retaliation, was to expel diplomatic officials.
Shorty after the World Cup, the US President appeared to be on amicable terms with the Russian President at the Helsinki Russia-US Summit. However, the repercussions of the Skripal incident were being developed behind the scenes. With pressure from Congress the following month, the US administration introduced an array of comprehensive sanctions on Russia targeting selected industries relating to national security and individuals. As well as demonstrating the US’ strong opposition and proactive stance to deter the use of chemical weapons, there is an additional objective here. The US security agencies are concerned about election meddling by Russia. The US, by imposing sanctions, are likely trying to show that there can be serious economic repercussions for such actions. The words of the US National Security Advisor, John Bolton in Ukraine on the 24 August do not inspire hope for any improvement of relations, unless there is a change of Russian behaviour.
Realistic consequences
The actual effect of these sanctions and actions from the US administration are limited, but not useless. The main and effective impact is further damage to the Russian currency. Before the Skripal incident and before the latest sanctions were implemented in February 2018, 1 USD was equivalent to around 55-58 RUB. As of mid-August 2018, 1 USD has been averaging around 68 RUB.
If the US and the Western governments are trying to bring a change in Russian foreign policy through sanctions alone, they are highly unlikely to succeed. Sanctions in general have only successfully brought about comprehensive change once – in South Africa. This example also required international boycotts and global condemnation. Russia, with China as a strong ally, has a considerable degree of soft-power throughout the world. If years of sanctions against Iran or North Korea have not created change, there is little chance they will achieve anything different from Russia.
A tangible effect that these sanctions will have is on business. Although sanctions are often aimed at individuals and certain political groups, business, markets and investments will suffer too. In this case, the timing is unfortunate. The European Union, as Russia’s biggest trading partner, is increasingly reliant on Russian gas to meet energy demands as well as the manufacturing of energy-intensive products; the sanctions will likely result in increased prices for consumers on both sides. A continuation of sanctions strains trade partnerships and business relations, having a detrimental knock-on effect at the political level. If the US ultimately want to keep dialogue, partnerships and relations with Russia close, advances of trade between Russia and China (sped-up as a result of sanctions) are not a good sign.
Outlook
As the two nations with the world’s largest militaries and largest stockpiles of nuclear weapons, Russian-US relations are important. Placing any powerful nation in a desperate and targeted situation should be avoided unequivocally. If the US wants an amicable relationship with Russia and wants to maintain international peace, this depends largely on their sanctioning behaviour. Although there should be condemnation for international incidents like the Crimea annexation and the Skripal poisoning, the US should also consider its own NATO military drills and presence on Russia’s doorstep to avoid provocation. Economic war via sanctions has come about as a result of recent events and until the approaching US midterm elections are over, US policy is unlikely to alter and we should expect a continuation of the retaliatory sanction environment.
