Overview
Washington appears to be trending back toward future economic engagement and sanctions relief for Russia despite its ongoing war with Ukraine, which could create misalignments between the US and Europe on sanctions policies and overall economic statecraft toward Russia. Over the last several months, the Trump administration has repeatedly signaled openness to reintegrating Russia into the global economy. At the same time, the EU’s stance on sanctions toward Russia and economic engagement is not softening but rather potentially hardening as Russia escalates its air war against Ukraine and its sabotage efforts against Europe.
Any moves by the US to offer sanctions relief to Russia will likely increase friction between the US and Europe on overarching policy goals regarding Russia and Ukraine. If the US provides Russia with concrete sanctions relief or economic engagement, companies could be confronted with compliance issues from divergent American and European sanctions regimes. American relief for Russia could markedly worsen US-European relations and undermine European trust in American policymaking given the overwhelming belief in most European capitals that Russia represents the most acute threat to the continent’s security.
Potential For Sanctions Relief: Recent Developments
Since the Trump administration took office, Washington has vacillated between pursuing economic rapprochement with Russia and providing greater support to Ukraine as ways to reach a political settlement between Moscow and Kyiv. The Alaska summit in 2025 was followed by a leaked peace plan in November 2025 associated with presidential envoy Steve Witkoff, which foresaw sanctions relief and US-Russia economic reengagement. Throughout 2026, the Trump administration has trended toward greater support for Ukraine, such as strong intelligence cooperation and an initial agreement for licensing Patriot interceptor production, but there are emerging signs that Washington is again softening its line toward Russia.
Recent reporting indicates that the US is interested in scaling up a sanctions relief scheme that Washington has pioneered with Belarus, a close Russian ally, to apply to Russia itself. The Trump administration has nominated John Coale, the administration’s current envoy to Belarus, to serve as Special Presidential Envoy for Hostage Affairs. Coale has been working with Minsk for over a year on releasing Belarusian political prisoners; his most recent deal saw 25 political prisoners released in exchange for sanctions relief on a state chemicals company and trading firm. Coale reportedly received Trump’s approval to apply this framework of political prisoner releases for sanctions relief to Russia.
Over the last several months, the US has made other moves to show its potential interest in economic reengagement with Russia, including preserving Russian crude flows and returning Russian diesel to global markets. Russian delegations attended G20 energy and finance ministerial meetings in the US, including Russian Finance Minister Anton Siluanov, and the White House has invited Russian President Vladimir Putin to attend the full G20 summit this year in Miami. Trump has also repeatedly blamed Ukrainian strikes on Russian energy infrastructure and refining capacity for global diesel shortages. Russia is one of the world’s largest refiners but halted diesel exports this summer after domestic shortages amid Ukrainian strikes, and diesel supply issues have emerged as a major focus point for the administration. Earlier this year, Washington repeatedly gave limited sanctions relief to Russian oil exports already at sea to dampen global supply issues stemming from the war with Iran. The US is also reportedly considering a multibillion-dollar deal under which the Development Finance Corporation would join a consortium purchasing global assets owned by Lukoil, a leading Russian energy company. Putin raised the potential deal in September during US-Russia discussions over the war in Ukraine.
Russia appears receptive to economic engagement. While President Putin’s press secretary Dmitry Peskov has stated that there are no discussions with the US on trading prisoner releases for sanctions relief, the Kremlin has previously agreed to prisoner exchanges involving Russian political prisoners. Russian Deputy Prime Minister Alexander Novak also recently raised the possibility of partially resuming diesel exports so long as the domestic market is secure in Russia, which depends on repairing domestic refineries. Putin has also linked the lack of Russian diesel on global markets to sanctions policy. Kirill Dmitriev, the head of Russia’s sovereign wealth fund and one of Moscow’s lead negotiators, recently claimed that the US and Russia are continuing dialogue regarding several different spheres, including energy. Dmitriev was in Washington for meetings with Treasury and Energy Department representatives in late September about possible US-Russia energy projects after the war ends.
US and European Divergences on Russia Are Reemerging
While the US is signaling potential reengagement with Moscow that is not tied to progress on the Ukraine front, the EU’s stance on Russia is resolute. Many European capitals bristled at the US decision to invite Russian figures to attend G20 events in the US, and over the summer, the EU’s top diplomat Kaja Kallas announced that the bloc was developing its largest ever package of new designations. Capitals are also boosting their support to Ukraine, such as by accelerating delivery of the EU’s €90-billion eurobond-backed loan to Ukraine and German Chancellor Friedrich Merz’s surprise visit to Ukraine to provide a new support package.
While the EU has struggled to agree on its most recent sanctions packages and to expand sanctions, there is no indication of sanctions relief or desire to offer Russia economic benefits or relief. The EU’s decision to delist Russian oligarchs Mikhail Fridman and Alisher Usmanov was made under pressure from France and Luxembourg, and in order to prevent further political fighting over delistings, all other listings of individuals and entities were extended for three years instead of the normal six months.
The marked uptick in Russia’s campaign of sabotage attempts and other covert actions against European states is also reinforcing Europe’s stance. Russia’s alleged actions have targeted areas including critical infrastructure, such as the Leipzig airport drone incident, as well as defense industrial facilities. After the drone incident in Leipzig, the German government unilaterally imposed new measures against Russia. In sum, it appears that Europe’s stance on Russia is hardening rather than softening.
Winter is Coming: Potential Risks and Implications
Washington’s signaling toward Moscow, while not guaranteed to result in actual sanctions relief or economic engagement, underscores the different ways that Europe and the US are shaping their respective Russia policies. The US has repeatedly broached economic reconciliation with Russia for two reasons: as a tool in negotiations with Moscow and in pursuit of commercial deals. Europe has little interest in restarting normal commercial relations with Russia and views sanctions relief as enabling Russia’s war machine.
Beyond the limited sanctions relief to Russian energy exports earlier this year, there has been no actual economic reengagement with Russia. And there is no guarantee that the White House will provide relief this time. During the G20 meeting of finance ministers in North Carolina, US Treasury Secretary Scott Bessent reportedly told Russian Finance Minister Siluanov that there could be no economic cooperation without peace in Ukraine, and CIA director John Ratcliffe traveled to Moscow in August to reportedly warn the Kremlin against escalation. The US also continues to cooperate with Ukraine, such as the recent announcement of projects under the U.S.–Ukraine Reconstruction Investment Fund. American sanctions through Operation Economic Outcast against Iran have also targeted Russian entities, such as payments network A7, due to Russia’s economic ties with Tehran.
But the reemergence of American interest in sanctions relief and commercial engagement with Russia comes at a critical moment that will likely sharpen Europe’s objections. Heading into the winter, Russia has escalated its air campaign against Ukraine in a bid to force Kyiv into submission by battering its economy. Ukraine’s Economy Ministry assesses that damage to Ukrainian physical assets this year from Russian attacks totals $10 billion, almost 5% of Ukraine’s GDP. At the same time, Russia’s economy is struggling even if it does not appear close to collapse; Moscow is spending more on servicing its debt, the government is reducing spending on social policies, education and medicine, raising taxes, and rapidly expanding defense expenditures. European capitals committed to supporting Ukraine will likely question why the White House is making these signals now.
At a minimum, Washington’s overtures to Russia highlight that the Trump administration is still considering options that almost all European capitals view as categorically unacceptable, namely relief for Russia without a durable peace agreement for Ukraine. For many European governments, Russia’s war against Ukraine is the defining issue for continental security. Washington’s approach risks undermining American reliability on a critically important issue.
Sanctions relief would significantly widen the gap between the US and Europe on overall Russia policy, and the US and Europe would be crafting sanctions regimes with divergent priorities and goals. Any sanctions relief based on waivers would be unstable given that a future administration could simply reapply them. While the Lindsey Graham sanctions act prohibits new investment in Russia, it also provides the White House with significant discretion on sanctions applications and waivers.
All of this would create a fast-moving compliance environment, complicated by divergence between the US and Europe and Washington’s shifting calibration of its economic statecraft. Economic diplomacy could enable some commercial interactions with Russia while creating an opaque and unstable picture regarding what economic and commercial relationships are permissible. While sanctions relief will not necessarily occur, it appears to be on the table for Washington, and the discussion itself shows exactly how far apart the US and Europe are in their respective approaches to Russia.
