Russia’s no democracy, so Trump’s sanctions won’t stop the war

Donald Trump has finally decided to hit Russia with sanctions – the first package he has imposed since he came back to the White House in January.

The sanctions target Rosneft and Lukoil, Russia’s two largest oil companies, as a retaliation for Vladimir Putin’s refusal to agree to a ceasefire in Ukraine. The announcement came in the wake of the decision to call off a planned summit between the two leaders in Budapest next month.

The US treasury secretary, Scott Bessent, said in a statement: “We encourage our allies to join us in and adhere to these sanctions.” In fact the EU has imposed 19 rounds of sanctions against Russia since the full-scale invasion in 2022.

The UK government has passed sanctions which it estimates have cost Russia more than US$37 billion since the start of the war. And the Biden administration also repeatedly imposed sanctions on Russia after the invasion.

In March 2022, I wrote a piece explaining why I thought the sanctions imposed on Russia in the aftermath of the full-scale invasion of Ukraine wouldn’t topple Putin. Sanctions often fail to achieve their goals – the Russian economy has specifically been set up to resist western sanctions.

Three years on, Russia’s land grab continues to ravage Ukraine, albeit clearly with much less success than expected by Russia’s generals. A lot of this resistance is due to Ukrainian military heroism and creativity, and a lot of it is due to humanitarian and military assistance from EU, the US and other allies. But how much of it was due to sanctions is open to debate.

Russia’s economy is now focused on waging war. And even in these days of drone combat, to wage war you need soldiers. The amounts paid to people joining up in Russia are unprecedented. Not only is their enlistment pay about the price of a decent apartment in a regional capital, but any debt they hold up to 10 million rubles (about $100,000) is wiped out.

Combat soldiers’ monthly salary is not a large amount by Western standards – the equivalent of about $2,600 a month. But when the alternative in Russia is being a security guard for a fifth of that, it is clear why many people who see no future – especially convicts who are also given pardons – enlist in the Russian armed forces.

Reservists and volunteers mean that Russia is able to maintain its fighting force. While the sanctions clearly hurt Russia’s economy, having sufficient soldiers is priority number one – and this is still largely unaffected.

Russia is managing to pay for the war, sanctions or no sanctions, by passing on the cost to the public. Value-added tax is forecast to rise from 20% to 22% in 2026 and the revenue threshold under which businesses will be required to pay will come down. This will lower investment into things like barber shops, but investment in military production will not be affected.

The sanctions do hurt the Russian economy – lifting sanctions is always the most important demand anytime Russia is consulted about a ceasefire – but not so much that the war economy is slowing down.

Finding loopholes

Thus far, Russia has managed to circumvent sanctions. Europe still buys large quantities of oil and gas from Russia (paying more than it has given Ukraine in aid, in fact). Moscow has also exported massive amounts to India and China, but the quantities are expected to fall sharply as a result of the US sanctions.

Earlier this year, the US president also announced a massive tariff hike on Indian exports in retaliation for India buying Russian energy supplies.

All of this will make the war more expensive – but it will not stop it. For a start, Russia controls a big “shadow fleet” of ships that have been transporting its oil and other banned goods such as military equipment and stolen Ukrainian grain. The EU has imposed port bans on 117 ships believed to be part of this shadow fleet. But experience suggests that this is by no means a foolproof way of preventing them from operating.

Death by 1,000 cuts

It’s tempting to imagine sanctions as trying to cause death by 1,000 cuts. The EU has made 19 cuts, so we are still 981 away – 980 with Trump’s latest move.

The West could have done more and it could have done it sooner. It could have acted as early as 2008 when Russia signalled its aggressive intent by invading Georgia. It could have imposed more effective sanctions after Russia annexed Crimea and parts of eastern Ukraine in 2014.

In any case, these sanctions are designed against a Western democracy. If they were imposed against the US or the UK, they would have changed governments. In Western democracies governments have power at the discretion of the voters, who can take those mandates back. Sanctions against autocracies, where power is not in the hands of the people, need to be different.

The good news is that the Trump administration is finally doing something besides putting out the red carpet for Putin. There is hope.

Sergey V. Popov is a senior lecturer in economics, Cardiff University.

This article is republished from The Conversation under a Creative Commons license. Read the original article.