FILE PHOTO: U.S. President Donald Trump and Russia’s President Vladimir Putin talk during the family photo session at the APEC Summit in Danang, Vietnam November 11, 2017.
Jorge Silva | Reuters
U.S. President Donald Trump’s deadline for Russia to cease its war in Ukraine expires on Friday, as markets watch whether the White House will proceed with steep penalties on Moscow’s oil clients.
Increasingly frustrated with the Kremlin, Trump has pledged “secondary tariffs” of “about 100%” on Russia’s trade partners, if Moscow does not end its invasion in Ukraine, setting an initial 50-day timeline that was later shortened.
Bloomberg News reported Friday that U.S. and Russian officials, citing sources familiar, are working toward a deal that would stop the war and allow Russia to occupy the territory it took during its yearslong invasion.
Trump has made ending the war in Ukraine a key foreign policy objective of his second presidential mandate, reversing course on an initial thawing of White House relations with Moscow to now pile on pressure on the Kremlin for the lull in diplomatic progress.
Earlier in the week, U.S. Special Envoy Steve Witkoff travelled for an eleventh-hour meeting with Putin, which Trump hailed as “highly productive.”
“Everyone agrees this War must come to a close, and we will work towards that in the days and weeks to come,” he said Wednesday.
In a Friday statement, White House Press Secretary Karoline Leavitt said Trump’s top priority remains finding a negotiation to end the war.
“At the President’s direction, Special Envoy Witkoff once again met with President Putin to discuss potential paths to peace, and the President and his national security team are discussing those paths with both the Ukrainians and the Europeans,” Leavitt said. “Out of respect for our sensitive diplomatic discussions with Russia, Ukraine, and our European allies, the White House will not comment on alleged details in the news media.”
Ukrainian President Volodymyr Zelenskyy said in an X post that he thought the U.S. was “determined” to get a ceasefire. In another social media post, he blamed Russia for the delay on action toward peace.
At the heart of Russia and Ukraine’s inability to strike a ceasefire to date have been differences over Putin’s maximalist demands that the war can only end if Kyiv gives up its ambitions to join the NATO military alliance and if Moscow retains four Ukrainian regions annexed during the latest conflict. Russia also seeks a final conclusion to the war and has previously called for new elections in Ukraine.
Trump’s optimism appeared to have dwindled by Thursday, despite suggestions that the U.S. president could meet his Russian counterpart over the coming days.
Asked Thursday whether he stood by the Friday deadline to Russian President Vladimir Putin, Trump said, “We’re going to see what he has to say. It’s going to be up to him. Very disappointed.”
At risk for Russia is the potential dissolution of its scant remaining client base for its crude and oil products volumes, which countries within the G7 are no longer permitted to take on a seaborne basis. Under a G7 scheme, nations outside of the coalition retain critical access to Western shipping and insurance mechanisms as long as they only purchase Russian supplies under a price cap.
Russia’s sanctions-sapped economy heavily depends on its crude sales, amid increasing isolation on the international stage and dwindling growth expected near 1.4% this year, from 4.3% in 2024, according to the World Bank’s June forecasts.
If it presses ahead, the introduction of the so-called secondary tariffs and Trump’s increasingly heated rhetoric would in turn strand Moscow’s buyers with a choice between continuing with cheap oil purchases or engaging with the U.S. on favorable trading terms. A first use of U.S. secondary tariffs is set to come in place on Aug. 27 by way of an additional 25% in duties for frequent Russian oil consumer India.
“It’s very significant that Trump has decided, though, to turn up the heat on his friend Narendra Modi in India, and not on Putin himself,” Tina Fordham, founder of Fordham Global Foresight, told CNBC’s “Squawk Box Europe” on Friday.
“It tells us, really, that President Trump is very reluctant to actually put the pressure directly on Putin. And so much so he’s willing to jeopardize this relationship with India, which is a hugely important ally within the wider context of U.S.-China relations.”