Op-ed: Businesses will push for return to Russia

Uneven sanctions relief risks leaving European companies behind

How tempting to jump to conclusions about a speedy end to the war on Ukraine. So much, it seems, is happening. Presidents Donald Trump and Vladimir Putin are burning up the phone lines while just beneath the surface, members of the Trump administration and parts of the US business community are impatient to do deals in Russia: US diplomacy and commerce are now inseparable.

And yet, so little has really changed. With little movement on the battlefield and Europe maintaining its support for Kyiv, Trump finds himself unable to force a Ukrainian surrender and Putin still won’t accept any other outcome. The result is a conflict that, in its most acute phase, is approaching the duration of the Second World War.

Events on the other side of the world make a negotiated outcome still less likely. The capture of Nicolás Maduro was a tactical triumph but regime change in Venezuela is unlikely to be smooth sailing. Trump has subsequently threatened Cuba, Chile, Greenland and Iran, where quick wins and long crises also beckon.

The US foreign policy machine does not have the institutional capacity to simultaneously manage serious engagements in both hemispheres, even at the best of times. To make matters worse, the Trump White House appears to be highly centralised, with all decisions going through a small circle of close advisors. If they get tied up dealing with Venezuela or elsewhere, they won’t be able to focus on bringing some sort of closure to the war on Ukraine.

The primary issue, however, remains the US’s heavy tilt toward normalisation, as shown by its adoption of Kremlin talking points. As a result, the air over Washington DC is now heavily scented with sanctions relief, at least those that Trump can lift unilaterally (Congress, still home to small nest of Russia hawks, will resist lifting sanctions enshrined in legislation).

By contrast, Europe remains so hostile to Russia that its foreign policy lead Kaja Kallas will not meet with her Russian counterpart, Sergei Lavrov. Although the EU last month refrained from allocating to Ukraine the frozen Russian central bank assets it holds, it devised a separate loan programme for Ukraine and shows no signs of wanting to lift sanctions.

Pressure from business

But if the US does reconcile with Russia, European leaders will feel the pressure to do the same – not only from American diplomats, but from their own businesses. European companies, especially those from Germany, have a long history in Russia and have long wanted business and politics to travel on separate tracks. They’ll be on the streets with torches and pitchforks if their US rivals are allowed to return to Russia while they remain banned.

This state of affairs is rich in irony. European trade with Russia has always been a vast multiple of American trade, yet now the US seems much closer to commercial re-engagement than Europe.

There are already some indications of European companies straining at the leash. The Belgian-Luxembourg Chamber of Commerce in Russia last month promoted a webinar on how to do business without those pesky sanctions getting in the way, according to Politico, offering advice on “alternative payment channels”.

In an ideal world, any removal of sanctions on Russia would be conditional on returning Ukrainian territory and would be done in a coordinated fashion between the US and Europe – just as they sought symmetry when they imposed sanctions following the full-scale invasion in 2022. Both the US and the EU could also consider lifting less onerous bans and embargos, such as reopening airspace, before the more complex undertaking of sanctions relief.

But harmonising anything with the Trump administration, which sees Europe as a commercial enemy, will be difficult. Following Trump’s zero-sum economic reasoning, the US may try to get the jump on Europe in re-entering Russia, especially in strategic sectors like energy, mining, and metals.

Moreover, once US sanctions are lifted, EU ones will be much less effective due to the US’s systemic role in the global economy and finance. Imagine the bitterness in European political circles at having to lift defunct sanctions on Russia because the Trump White House beat them to it, particularly after years of working to keep them in place.

New facts on the ground

In any case, the return of Western business will not mean a return to the status quo. As the war grinds on longer than anyone envisioned, Russia on the ground is a changed place. Companies seeking to re-enter the country will find new political and economic elites, new business legislation, and new attitudes toward foreign investment. They will also find new competitors, from places like Turkey and China. And there are still hundreds of companies that never left Russia, many of them working below the radar of public scrutiny.

Perhaps the way back is not for companies to pick up exactly how and where they left off, if that is even possible. There are more careful and measured ways to return to the Russian market for companies with the desire to re-engage, if and when the time comes.

But the drive to return to high-risk environments seems almost pervasive. US media outlets are already reporting that teams of American business leaders are preparing to visit Venezuela. Any change to the Russian operating environment is likely to provoke a similar rush.

Charles Hecker is an associate fellow for international security at the Royal United Services Institute (RUSI) and the author of Zero Sum: The Arc of International Business in Russia.