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Padmashree Anandhan
17 July 2025 |
In the news
On 12 July, US President Donald Trump reached an agreement with NATO leaders to supply weapons to Ukraine. He explained that the US will send weapons to NATO, which will cover the cost and transfer them to Ukraine. Trump said: “We will send them Patriots, which they desperately need, because Putin really surprised a lot of people. He talks nice and then bombs everybody in the evening. But there's a little bit of a problem there. I don't like it.” The Patriot missiles have advanced capabilities to destroy cruise and ballistic missiles.
On 14 July, responding to Trump’s decision to send Patriots, Russia’s spokesperson Dmitry Peskov said that while Europe is covering part of the costs, the flow of US weapons and equipment to Ukraine continues.
On 14 July, Trump warned of imposing severe tariffs on Russia if a peace deal with Ukraine is not reached within 50 days. He said that the tariffs would reach 100 per cent and described them as “secondary tariffs.”
On 15 July, in response to Trump's 50-day deadline, Peskov emphasized that Russia will evaluate the implications. Although until now, Russia has not accepted any US ceasefire proposals, Peskov reiterated that Russia is open to negotiate and waits for Ukraine to propose the timing for a third round of talks.
Issues at large
First, the new US sanctions on Russia. The US sanctions targeted Russia’s major sectors. In the financial sector, the US froze USD five billion in Russian central bank assets, cut major Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and banned trading in Russian securities. In the energy sector, Russian oil, gas, coal and enriched uranium imports are banned. In the military and technology sectors, especially in semiconductors, the goods which use US technology are under the sanction. The sanctions additionally extend to Russia’s diamonds and foreign firms helping circumvent sanctions. The EU has aligned with US sanctions, although it lags in the energy sector due to its dependency on Russian gas. However, it has pledged to stop imports by 2027. Besides, the EU holds two-thirds of frozen Russian central bank assets, which it projects to use for Ukraine’s recovery.
Second, the state of sanctions and the Russian response. Sanctions have reduced Russia’s oil and gas revenues, placing central bank assets at risk. However, it has not led to a larger economic collapse or stopped Russia from its ongoing offensive in Ukraine. According to a report by Deutsche Welle, Russia’s GDP witnessed four per cent growth in 2023 and 3.6 per cent growth in 2024, fuelled by war spending. However, this trend is not expected to continue in 2025 and 2026, with GDP expected to decline below two per cent. The effect on Russia’s economy has been in the form of shortages in critical goods. Russia has circumvented the sanctions by using a “shadow fleet” of oil tankers and using Rubles for Yuan. This has helped it to maintain its offensive on the ground. Despite the sanctions and negotiation efforts by the US and European leaders, Russia has managed to continue its offensive in the eastern Donetsk and launch a new offensive in Sumy Oblast. This has shaken the confidence of Trump, who aims to end the war soon.
Third, the extent of military aid to Ukraine. The West has supplied Ukraine with a wide range of advanced air defence systems and missiles to counter Russia’s strikes. But it has not been enough to succeed in an offensive. The military aid is dominated by the US, which provides several Patriot batteries. Meanwhile, NASAMS, IRIS-T, SAMP/T, Crotale, and S-300 surface-to-air missile systems have been delivered by several NATO countries. Thousands of air defence systems, including Gravehawk, Stingers and Starstreaks, have been sent along with hundreds of ASRAAM, Hellfire, and AMRAAM missiles by the US and the UK. Despite these efforts, concerns remain about sustaining Ukraine’s stock and defending against Russia’s continued aerial assaults.
In perspective
First, increased efforts for a ceasefire deal. Under Trump’s presidency, the initial stance on criticising Ukraine for undermining deals and supporting the Russian narrative began to change after May. The continued aerial attacks and no heed for the ceasefire call by Russia slowly garnered frustration from Trump. The two rounds of talks mediated by Turkey aided in prisoner exchange and dead-body swap, but apart from the humanitarian aspect, no ceasefire deal was in place. Russia continues to strongly demand for cessation of annexed Ukrainian territories. This has now led Trump to begin to give real warnings on sanctions and place a deadline to further pressure Russia. However, such threats to come into effect at the negotiation table for a breakthrough still seem a long way.
Second, Putin and Trump’s brief honeymoon. Starting from Trump’s first presidency, the administration has a record of not imposing any sanctions on Russia during 2017-2021. There have been doubts about Russia’s interference in the elections, but Trump and Putin have remained cordial personally. The divergence began to emerge over NATO interests, war in Ukraine and continued non-agreement of Russia to any ceasefire demands by the US. Upon this, the NATO countries pledging to increase defence expenditure, combined with the urge to end the war soon, has pushed Trump to plan for measures against Russia. Thus, signalling a crack in the confidence in Putin.
About the author
Padmashree Anandhan is a Project Associate at NIAS.
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