Will Russia surrender to Donald Trump's threat of 'severe tariffs' and sign ceasefire with Ukraine? It is not likely as...

Will Russia succumb to the US threat of increased tariff rates and rush to sign a ceasefire with Ukraine, the neighbouring country it invaded in February 2022? Or, will President Vladimir Putin rebuff the pressure tactics of his US counterpart, Donald Trump and continue targeting Ukrainian military facilities at a time when the Russian Army is making advances and capturing new areas? Already tottering under the pressure of the US and the EU sanctions, can the Russian economy withstand more pressure amid the raging war? What is the way out for Moscow? 

Donald Trump threatens Russia with 'severe tariffs'

Not only the Russian economists, but the experts across the world are ruminating over these questions. Donald Trump, who is not known as a great diplomat, made his intentions clear in the most unambiguous terms when he said bluntly that he would implement "severe tariffs" unless a peace deal was reached within 50 days. He said, "We’re going to be doing very severe tariffs if we don’t have a deal in 50 days, tariffs at about 100%". He also indicated that the US would impose additional tariffs on those countries that buy Russian goods. It can be understood by an example. If India further buys oil from Russia, US companies that purchase Indian goods would have to pay a 100% import tax, or tariff, when the products reach their shores.

How have sanctions impacted Russia?

The then US President Joe Biden imposed economic sanctions on Russia in 2022, weeks after Moscow invaded Ukraine, citing its intention to threaten Russian security by joining NATO. According to the International Monetary Fund, the Russian economy shrank by 2.1% in the first year of sanctions. The Russian GDP registered a meagre growth rate of 2.2% in 2023 and 1.1% in 2024. The US Treasury claimed that its sanctions cut 5% of the economic growth Moscow could have achieved. 

The European Union also slapped Russia with a separate set of economic sanctions after the Ukraine War had begun. According to the Foreign, Commonwealth & Development Office's (FCDO's),  the EU sanctions have deprived Russia of about $450 billion in war funds. 

Why is Russia not rattled by US threat?

However, analysts believe that Russia is not in a hurry for a ceasefire as its forces are advancing and taking control of new areas despite losses. If it agrees to a ceasefire proposal, it would do so on its terms. It will not be deterred by the US threat of increased tariffs. Moscow is not rattled by the threat of increased tariffs, which can be understood by the fact that its stock exchange rose by 2.7% after Trump's announcement. It appears that Russia was relieved that a timespan of 50 days is available, and it can be used to plan for a counteroffer to delay the implementation. Similarly, it is also relieved that the secondary tariffs against Russia's trading partners will only kick in 50 days from now.