U.S. zero tariffs for Russia: strategic gamble in Ukraine war

Zero U.S. tariffs for Russia amid increased rates for Ukraine and exotic islands with penguins surprised many. But it’s possible that tariffs are a bargaining position by the Americans regarding the war in Ukraine.

"As we can see, the Trump administration actively uses economic tools as the main lever of pressure — both on allies and opponents. This also applies to Russia in the negotiation process over the war: most of the American “warnings” to Putin boil down to threats of sanctions, tariffs, and duties capable of destroying the Russian economy."

If Putin were genuinely concerned about money, then the prospect of maintaining zero tariffs in trade with the U.S. could actually be an argument. But years of war have given us enough evidence that Putin is not interested in the economy. He is interested only in politics. That is, the destruction of Ukraine — as the first act in a long-term scenario of subjugating Europe and redistributing spheres of influence in the world. For this, the Kremlin is ready to pay any price: in human lives, resources, the loss of the country’s future, and so on. What truly concerns him is only the political result.

For context: tariffs against Russia were not introduced at all. The U.S. Treasury Secretary says this is due to the insignificant volume of trade between the countries. But Russian exports to the U.S. last year amounted to $3.5 billion. And that’s four times more than Ukraine’s. Our figure is $874 million. So if the small volume of Russian imports results in zero tariffs for Russia, then how do we explain 10% tariffs on even smaller Ukrainian imports?

Be that as it may, the new U.S. tariff policy will not have a direct impact on Ukraine. But an indirect impact is very likely.

"First, if the tariff war gains momentum, it could trigger a global economic crisis. As a result, our allies will have fewer resources to support Ukraine."

On the other hand, there’s a “conditionally good” piece of news: a serious crisis will almost certainly lead to a collapse in oil prices. Just a few hours after the announcement of the tariffs, oil prices dropped by 7%, and they continue to fall. If the price drops to $30–40 per barrel, Russia will run out of money and simply won’t be able to finance the war. According to economists, this is the economic threshold for the Kremlin’s ability to continue military action. It’s not a fast scenario, but by many assessments, it’s perhaps the only truly effective economic lever that could impact Russia’s ability to fund the war.

A few days ago, a bipartisan bill was introduced in the U.S. proposing 500% tariffs on imports from countries that buy Russian oil and gas. Primarily, this refers to India and China. If the law is passed, these countries will have additional incentives to pressure Putin to end the war as soon as possible. And if that doesn’t work, the American tariffs themselves may rise even further.

In other words, the tariff war is both a risk and an opportunity for Ukraine. And in such a situation, the value of our relationships with allies only increases. Their support helps us hold the front and, ultimately, bring victory closer.

Source

About the author: Mykola Kniazhytskyi, Ukrainian journalist, member of the parliament.

The editorial team doesn’t always share the opinions expressed by the authors of the blogs.