Trump shocks Russia: millions in losses due to impending sanctions!

Trump shocks Russia: millions in losses due to impending sanctions!

Economic turmoil in Russia is increasing as geopolitical tensions rise as a result of the Ukraine negotiations. US President Donald Trump has significantly toughened his tone towards Vladimir Putin, causing confusion and uncertainty in international markets. Trump called Putin “crazy” and criticized aggressive military attacks on civilians in Ukraine. The Kremlin responded to these statements: Kremlin spokesman Dmitry Peskov tried to put the impact of Trump's statements into perspective, but the uncertainty about possible new sanctions remains.

The immediate market reactions were serious. According to a report by the FR the Moscow Stock Exchange Index (MOEX) fell by 1.51% to 2,711 points, resulting in a decline in market capitalization by 100 billion rubles. The shares of large Russian companies were particularly affected: Gazprom shares fell by 3.5%, Sberbank by 1.5% and VTB by 2.4%. Investment firm Finam attributes the decline to Trump's aggressive rhetoric and general market uncertainty.

Fears about the future and tariffs

In addition, Trump has a duty to take further economic measures. Until a peace agreement is concluded with Ukraine, he is threatening Russia with extensive punitive measures, including tariffs. The threat of sanctions is not new; Trump has often threatened such measures in the past, including against Mexico and Canada. However, these were temporarily suspended due to insufficient progress in combating fentanyl smuggling.

Trump has not only targeted Russia, but also sharply criticized Ukrainian President Volodymyr Zelensky. He gave him responsibility for the ongoing conflict and recommended that both warring parties sit down at the negotiating table immediately. In a current public dispute between Trump and Zelensky in the White House, a planned agreement on access to rare earths in Ukraine was canceled. Nevertheless, there are signs of a rapprochement between Washington and Kyiv. Zelensky expressed his willingness to renegotiate the raw materials agreement, which Trump noted positively in his speech to the US Congress.

Criticism of the economic situation

The economic situation in Russia remains tense. Total profits of Russian companies fell 6.9% year-on-year to 30.4 trillion rubles ($381.1 billion) in 2024. Due to high interest rates, declining sales and pressure from international sanctions, the boards of at least two dozen listed companies are recommending against dividend payments for 2024. Many companies report a significant decline in their financial performance.

This development is being watched with concern by Western partners, particularly given Russia's ongoing wave of attacks on Ukraine. More than half of Ukraine's electricity generation capacity has already been destroyed by the conflict. Next week, the USA and Ukraine want to discuss a ceasefire with Russia in Saudi Arabia, which could further influence the geopolitical situation.

The uncertainties in international politics and the associated economic challenges are clearly reflected in the reaction of the markets and the conduct of negotiations. While Trump and Western partners try to find a solution, the situation in Russia remains tense and uncertain.