New US sanctions further chill Biden-Putin relations

The U.S. and Russia entered a new phase of heightened tensions Thursday after President Biden announced punishing sanctions over cyberattacks, election interference and threats against U.S. soldiers in Afghanistan.

The decision to impose sanctions comes as Biden is attempting to strike a delicate balance of forcefully confronting Russian President Valdimir Putin and seeking open communication to establish a “stable and predictable” relationship.

“Our objective here is not to escalate. Our objective here is to impose costs for what we feel are unacceptable actions by the Russian government,” White House press secretary Jen Psaki said in a briefing with reporters Thursday. “We can’t predict what the impact will be, but we still believe that when there’s unacceptable behavior, we should put consequences in place.”

The U.S. is by far the stronger power when compared to Russia’s economy and political standing on the world stage. But Moscow’s formidable nuclear arsenal, its seat on the United Nations Security Council and its influence in the 2015 Iran nuclear agreement make cooperation necessary.

Biden, who earlier this year called Putin a “killer,” has previously asked his Russian counterpart for an in-person summit in a third country, but Thursday’s sanctions targeting the country’s sovereign debt and the expulsion of diplomats from the U.S. is chilling those relations.

“These are pretty low relations but they are not as low as they were during the Cold War, obviously … [but] things have taken a turn for the worse,” said Gary Hufbauer, a former deputy assistant secretary of the Treasury for trade and investment policy who’s now a nonresident senior fellow with the Peterson Institute for International Economics in Washington.

Kremlin spokesperson Dmitry Peskov told Russian news agency TASS that the sanctions announcement hurts the chances of organizing an in-person meeting between Biden and Putin and said to expect retaliatory measures from Moscow.

“It goes without saying that possible sanctions being discussed would by no means promote such a meeting,” he told Tass. “We condemn any pursuit of sanctions, we consider them illegal. In any case, the principle of reciprocity in this matter is valid; reciprocity in a way that best serves our interests.”

While Russia weighs its reaction, Washington is reiterating calls for Moscow to back off its massive military buildup on its border with Ukraine and in the occupied Crimean peninsula.

U.S. officials say it is the largest concentration of Russian troops on Ukraine’s border since it invaded and illegally annexed Crimea in 2014, sparking fighting in the country’s east that continues today.

Defense Secretary Lloyd Austin on Wednesday warned Moscow against any escalation.

“I call on Russia to respect Ukraine’s territorial integrity. We are committed to assisting Ukraine with its self-defense needs,” he said at a press briefing alongside NATO Secretary General Jens Stoltenberg and Secretary of State Antony Blinken in Brussels. 

On Capitol Hill, Biden’s actions were celebrated by Democrats on Thursday and even welcomed by some Republicans, a sign of bipartisan unity.

“The tough new measures ordered by President Biden make clear that the United States will act firmly and forcefully to hold Russia accountable for its aggression against America and our allies,” Speaker Nancy Pelosi (D-Calif.) said in a statement. “The era of impunity for Moscow’s assault on the rule of law is over.”

Rep. John Katko (R-N.Y.), the ranking member of the House Homeland Security Committee, called the sanctions “justified steps,” while Senate Intelligence Committee Vice Chairman Marco Rubio (R-Fla.) said the malicious actions by Russia demand “a strong response.”

“The best way to deter future cyber-attacks, domestic meddling, and foreign aggression is for the U.S. Government to respond aggressively to Putin’s corrupt regime,” Rubio said in a statement.

Sen. Angus King (I-Maine) said it was a strong step to deter cyber adversaries.

“There must be a price paid, and today the bill is coming due to Moscow,” King said.

Actions taken by the administration Thursday include the expulsion of 10 Russian diplomats from Washington, sanctions against six Russian technology companies and blacklisting 32 people identified as involved in election influence operations.

Biden also directed the Treasury Department to block U.S. financial institutions from purchasing bonds from Russia’s Central Bank, National Wealth Fund or Ministry of Finance and from lending funds to these institutions. The directive, all announced in an executive order, leaves open the possibility for the administration to sanction Russia’s sovereign debt.

Hufbauer said the focus on sovereign debt could make international banks think twice before buying Russian bonds, a key asset of Moscow’s finances.

“What market participants will say, after they read the executive order and digest it, is that this could be just the first step,” Hufbauer said. “There have been other steps before on sanctions on Russia but relations are not getting any better between Russia and the United States and more could be issued down the line.”

A senior administration official said the sanctions were designed to punish and deter Russia for its malign activities, not incite a confrontation.

“We have no desire to be in an escalatory cycle with Russia, we intend these responses to be proportionate and tailored to the specific past activity and past actions that Russia has taken, we have indicated that we seek a stable and predictable relationship going forward,” the official said.

Evelyn Farkas, who served as deputy assistant secretary for Defense for Russia, Ukraine, and Eurasia during the Obama administration, said Biden’s actions are an effort to establish strength against Moscow while remaining open for cooperation.

“What we will have is firmness from this administration but then also simultaneously a constant putting out the hand, ready to talk. … We do have to talk to ensure we have no miscalculation, to avert the danger of military conflict” somewhere in the world, she said.

While Putin will likely delay accepting a meeting with Biden, possibly even firmly rejecting a summit, in the immediate aftermath of the sanctions, Farkas said he is likely to acquiesce down the road as part of his desire to present Moscow as an important player on the world stage.

“The Russians want to be players at the head table,” Farkas added. “They can’t do that without talking to us.”

Morgan Chalfant contributed.