As of 2025, the global system has entered a period in which economic and political competition between major powers is conducted through more assertive instruments. The United States (US), through its newly adopted tariff policies based on the principle of reciprocity in foreign trade, has directly targeted China while also causing significant repercussions for energy-export-dependent economies such as Russia. In particular, the global supply-demand imbalances caused by the Trade War have increased Moscow’s economic vulnerabilities; simultaneously, Russia’s growing dependence on China and the financial burden of the Russia–Ukraine War have constrained the maneuvering space of Russian foreign policy.
The “Fair and Reciprocal Trade Plan,” announced by US President Donald Trump on February 13, 2025, has begun to show its effect on the international economy as a structural attempt to rectify the long-standing foreign trade imbalances faced by the US.[1] At the core of the plan lies the principle of reciprocity; unilateral trade measures such as tariffs, import bans, and digital service taxes implemented by India, Brazil, and the European Union (EU) are weakening the competitiveness of American exporters in global markets and deepening the US foreign trade deficit.
Under this policy, tariffs imposed on China were initially set at 34%, but were soon raised to 104% and then to 125%; in response, Beijing imposed retaliatory tariffs of 84% on American products. These escalating tax barriers have directly affected not only bilateral relations but also global trade balances and energy markets. On April 10, 2025, the yuan fell to its lowest level since 2007, indicating that the trade war had also triggered a strong shockwave across financial markets.[2]
Although not a direct target of the US–China Trade War, Russia has become the most vulnerable third party in these developments. This is due to the fact that Russia’s economic structure is heavily reliant on energy exports, with China being its main energy importer. As the Chinese economy slowed down, demand for Russian oil declined, leading to a direct decrease in Russia’s energy revenues. In parallel, OPEC+ (including Russia) decided to increase daily oil production by 411,000 barrels earlier than expected; this supply surplus further pushed global oil prices downward. As of April 7, 2025, the price per barrel of Russian Urals oil dropped to $51.54, well below the $70 average assumed in Moscow’s 2025 budget projections.[3]
While the Moscow Stock Exchange lost over 5% in value, investor confidence was significantly shaken. The Governor of the Central Bank of Russia, Elvira Nabiullina, pointed out that falling oil prices and the contraction in domestic consumption were generating new economic risks.[4] Meanwhile, Russian Foreign Ministry Spokesperson Maria Zakharova stated that the US’s unilateral customs tariffs violated World Trade Organization (WTO) rules and emphasized that these actions posed a threat to global economic stability.[5]
The allocation of 32% of the 2025 budget to defense spending has raised questions about the sustainability of the war in Ukraine. The growing budget deficit has made it increasingly difficult for Moscow to sustain both social expenditures and military operations simultaneously, placing Russia under dual financial pressure both domestically and internationally. According to commentary by John Gawthrop, the current situation is described as a “perfect storm” for Russia in every sense.
Although Russia appears to be indirectly protected due to its technical exclusion from the United States’ new tariff list, this exemption has failed to calm the markets. While Moscow exported goods worth $3.27 billion to the US and imported goods worth $526 million in 2024, it was expected to face tariff rates of up to 40%. Its absence from the list has been interpreted as part of the US strategy to exert pressure on President Putin during Ukraine peace negotiations.[6] On April 6, 2025, White House National Economic Council Director Kevin Hassett stated that the exemption was a deliberate decision by President Trump aimed at not disrupting the negotiations.[7] In the same week, Kremlin envoy Kirill Dmitriev visited Washington, emphasizing investment cooperation and the need for a “respectful dialogue,” showing that Moscow viewed the exemption not only as a technical issue but also as a diplomatic gesture.
On April 8, 2025, Deputy Foreign Minister Andrey Rudenko stated that the US–China Trade War had not damaged Russia–China relations; on the contrary, it had deepened their strategic partnership.[8] In response to the West’s unilateral economic pressures, Russia has sought to position itself within a stable axis of partnership in a multipolar global order by intensifying its multidimensional cooperation with China.
At the same time, another process closely followed by Russia is the indirect negotiations between the US and Iran being held in Muscat. These contacts, shaped by issues such as the nuclear program, prisoner exchange, and the easing of sanctions, are considered by Moscow not only as a potential reconciliation between the two countries but also as a development that could impact regional power dynamics. For Russia, Iran is one of the main pillars of the non-Western multipolar system, especially in terms of energy and military cooperation. Iranian Foreign Minister Abbas Araghchi’s announcement that a general framework agreement is being drafted indicates that the process is deepening and that Russia’s sphere of influence is being tested.[9]
Despite President Trump’s pledge to end the Russia–Ukraine War, no concrete progress has been made within three months. The most recent meeting between Putin and Witkoff in St. Petersburg produced no results. Witkoff’s proposal to recognize four Russian-controlled regions and his engagement with Russian officials under sanctions reveal that the negotiations are also being approached as a diplomatic normalization process between the US and Moscow.[10] On April 13, 2025, President Trump, speaking aboard Air Force One, stated, “I think everything is going well between Ukraine and Russia. And very soon, you’ll see it too…”[11], adopting an optimistic tone; however, this statement highlighted that the process remains in a state of political rhetoric and uncertainty.
In addition, Executive Order No. 14024, issued by the Biden administration on April 15, 2021, includes sanctions targeting Russian individuals and entities held responsible for cyberattacks, election interference, harm to US citizens, and activities aimed at circumventing sanctions. In March 2025, Kremlin spokesperson Dmitry Peskov declared these sanctions illegal and stated that they should be lifted, but Donald Trump extended the measures for another year.[12]
The escalation of the Trade War through increased tariffs on China within the framework of the United States’ “Fair and Reciprocal Trade Plan” has caused a rupture in the global economic system and produced indirect yet profound effects for Russia. The decline in China’s energy demand has pressured Russia’s primary source of revenue; in addition, the supply surplus resulting from increased OPEC+ production has driven oil prices below Moscow’s budget projections. These developments have rendered Russia more vulnerable to fluctuations in energy markets. While Russia considers solidarity with China a strategic priority and a short-term buffer against the West, in the long term, this approach carries the risk of creating a structural imbalance that could leave Moscow economically dependent on Beijing. In the event of a potential shift in China’s policy direction or a more aggressive pricing stance, Russia’s position in foreign trade could weaken.
Although the US decision to exempt Russia from tariffs was initially perceived as a diplomatic gesture linked to peace negotiations, it has not led to tangible relief in the markets. The decline of the Moscow Stock Exchange, losses in energy revenues, and the erosion of investor confidence all point to a disruption in the economy’s core dynamics. While Russia attempts to gain time in its negotiations with the US on Ukraine, it is simultaneously strengthening short-term economic solidarity with China. However, should the indirect negotiations between the US and Iran succeed, Russia’s sphere of influence in the Middle East may shrink. In such a scenario, Moscow could face pressure not only through falling energy prices but also through the West’s geopolitical containment strategies.
The stalemate of the Russia–Ukraine War on both military and diplomatic fronts is straining Russia’s economic and military capacities. In 2025, when 32% of the national budget is allocated to defense, the decline in energy revenues is forcing Moscow to cut domestic social spending and balance the financial cost of the war. Despite positive messaging from the Trump administration during peace negotiations, the lack of concrete progress and the extension of the US sanctions decree have undermined Moscow’s potential expectations for normalization with the West. In this context, Russia’s available options are to take measures that preserve popular support in the face of internal fiscal contraction, and externally, to attempt building alternative economic partnerships without becoming more dependent on China. However, the short-term success of these efforts will depend on the recovery of global energy prices and the containment of the Trade War.
In this multilayered environment of uncertainty, Russia operates as an actor whose political maneuverability is increasingly constrained by geoeconomic pressures, navigating a fragile balance between both Eastern and Western (US-centered) axes. As the US–China Trade War intensifies, Moscow finds itself economically squeezed due to declining energy-based foreign revenues and rising military expenditures; in relations with the US, it is compelled to act with strategic patience due to the persistence of sanctions and the diplomatic impasse in Ukraine. In this regard, Russia’s current situation reflects the profile of a power that, despite avoiding direct conflicts, is bearing some of the most costly indirect consequences of global tensions—forcing Moscow both to preserve social stability at home and to develop greater flexibility in its foreign policy.
[1] “Fact Sheet: President Donald J. Trump Announces ‘Fair and Reciprocal Plan’ on Trade”, The White House, https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-announces-fair-and-reciprocal-plan-on-trade, (Access Date: 13.04.2025).
[2] “Peskov: RF Analiziruyet Vozmozhnyye Posledstviya Uvelicheniya Poshlin Mezhdu SSHA i KNR”, Vedomosti, https://www.vedomosti.ru/politics/news/2025/04/10/1103567-peskov-rf-analiziruet, (Access Date: 13.04.2025).
[3] Ciaran McGrath, “Russia’s Economy on the Brink as Trump Tariffs Send Oil Prices Tumbling to Three-Year Low”, Express, https://www.express.co.uk/news/world/2039694/russia-economy-brink-trump-tariffs-ukraine, (Access Date: 13.04.2025).
[4] “Trump Tariffs Show Disregard for International Norms, Russia Says”, The Moscow Times, https://www.themoscowtimes.com/2025/04/09/trump-tariffs-show-disregard-for-international-norms-russia-says-a88666, (Access Date: 13.04.2025).
[5] “Rossiya Poobeshchala Mery iz za Tarifnoy Voyny SSHA i Kitaya”, RBC, https://www.rbc.ru/rbcfreenews/67f65dd89a794790ad24c433, (Access Date: 13.04.2025).
[6] Alexander Kolyandr, “Russia – Zero Tariffs Bring Zero Relief”, CEPA, https://cepa.org/article/russia-zero-tariffs-bring-zero-relief, (Access Date: 13.04.2025).
[7] Sonya Bandouil, “Russia Excluded From US tariff list Due to Ongoing Ceasefire Negotiations, White House Says”, The Kyiv Independent, https://kyivindependent.com/russia-excluded-from-us-tariff-list-due-to-ongoing-ceasefire-negotiations-white-house-says, (Access Date: 13.04.2025).
[8] “Rudenko: Tarify Mezhdu Kitayem i SSHA ne Povliyayut na Sotrudnichestvo Moskvy i Pekina”, TASS, https://tass.ru/ekonomika/23626393, (Access Date: 13.04.2025).
[9] “Vtoroy Raund Peregovorov SSHA i Irana Proydet v Omane 19 Aprelya”, TASS, https://tass.ru/mezhdunarodnaya-panorama/23669325, (Access Date: 13.04.2025).
[10] Lisa Haseldine, “Trump Tells Russia to ‘Get Moving’”, Spectator, https://www.spectator.co.uk/article/trump-tells-russia-to-get-moving, (Access Date: 13.04.2025).
[11] “Tramp Zayavil o Progresse na Peregovorakh po Ukraine”, TASS, https://tass.ru/mezhdunarodnaya-panorama/23670675, (Access Date: 13.04.2025).
[12] “Tramp Prodlil na God Paket Sanktsiy Baydena Protiv Rossii”, TASS, https://tass.ru/mezhdunarodnaya-panorama/23669495, (Access Date: 13.04.2025).
