The Curious Case of the Evolving Peace Strategy Over Ukraine
US-Russia Trade | Kremlin Envoy Goes to Washington | Ceasefire Challenges
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In last week’s BWR, I discussed Putin dragging out the ceasefire negotiations.
This week, I will discuss the curious Trump strategy toward a ceasefire. Trump is pulling out all the stops, even exclusion from the universal 10% liberation tariff. A deal requires motivated stakeholders, and Putin is the key stakeholder in this equation and is not sufficiently motivated.
Takeaways
MOTIVATED SELLER—Trump will pull out all the stops to secure a ceasefire agreement, and Putin knows it. The reality is that Putin is not sufficiently motivated to come to a ceasefire agreement.
MOTIVATED BUYER—Putin is not a motivated buyer of a ceasefire, never mind a peace deal. Putin has sent Dmitriev to persuade Trump with business deals and flattery. Putin’s ultimate goal is the subjugation of Ukraine and Russia’s near abroad.
MOTIVATED STAKEHOLDERS—The US, Ukraine, and the EU are motivated to reach a ceasefire agreement. Putin is missing from this equation.
The Curious Case of the Evolving Peace Strategy Over Ukraine
US-Russia Trade | Kremlin Envoy Goes to Washington | Ceasefire Challenges
US Global Tariffs – Not Russia
Last week, as $9 trillion evaporated from global markets due to US President Donald Trump’s trade tariffs against allies and adversaries worldwide, the Moscow Exchange (MOEX) dropped 8.5%, erasing $24 billion in market capitalization. The biggest losers on the MOEX were the usual suspects in the energy and banking sectors—Rosneft, Gazprom, Sberbank, Novatek, and others.
Strangely, Trump’s “Liberation Day” blitz of US tariffs across the globe did not include Russia and Belarus. When asked about Russia's absence from the U.S. tariff list, Treasury Secretary Scott Bessent stated that the US does not trade with Russia because sanctions are in place.
The reality is that the U.S. does engage in trade with Russia. According to the U.S. Trade Representative, total goods trade with Russia was estimated at $3.5B. This stands in stark contrast to the $30B in total traded goods between the US and Russia in 2021. In 2024, U.S. imports from Russia totaled $3.0B, which mostly consisted of important strategic goods such as fertilizers, inorganic chemicals, and nuclear fuel. The trade deficit with Russia was $2.5B.
Countries with significantly smaller trade deficits, a key metric for determining the tariff percentage, made the tariff list and are being subject to the 10% universal tariff on all imported goods. Even an island of friendly penguins, located on the uninhabited Heard Islands was slapped by Liberation Day tariffs.
Tariffs on Russia are among the few chips Trump has left on the table, possibly to be leveraged in the future. However, considering the strategic importance of the Russian imports—fertilizers for US farmers who are being adversely affected by Trump’s tariffs—the tariffs’ intrinsic value in influencing Russia is limited at best.
Dmitriev Goes to Washington
Last week, Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), was sent to Washington to hold discussions with the Trump administration about joint investment opportunities with Russia and ceasefire conditions.
Like Tom Hagen, the fictional Irish consigliere of the Corleone family in The Godfather, Dmitriev is a trusted “adopted” member of Putin's inner circle. He does not come from the Siloviki world but was admitted into the circle of trust through the endorsement of a Putin family member. Born in Ukraine and educated in the US (Harvard and Stanford), he is an investment banker well-versed in Western business practices and the history of USAID initiatives in Russia. In addition to his previous experiences with McKinsey and Goldman Sachs, he also held a senior role at Delta Capital, a Moscow-based investment bank that originated from the U.S. government-funded US Russia Investment Fund established in the 1990s.
Normalizing US–Russia relations has been an unspoken parallel goal for both Trump and Putin since peace negotiations surrounding Putin’s war on Ukraine began in February. For Trump, a successful peace agreement or ceasefire represents a path to a Nobel Peace Prize. It also corresponds with his realpolitik view of dividing up the World among the great powers. The business and investment opportunities for US companies in Russia and Ukrainian sovereignty are secondary. For Putin, normalized relations with the US provide recognition on the global stage that he, the Russian president, is equal to the US president. Putin perceives himself as the man who rescued Mother Russia from the abyss. Preserving Russia’s influence over Ukraine, a subject of the old Russian and Soviet Empires secures Russia’s influence in its near abroad—Central Asia, the Caucasus, and Eastern Europe.
Dmitriev has been brought into the peace negotiations by Putin, much to the chagrin of old-guard figures like Lavrov, in order to articulate investment opportunities in and with Russia to Trump’s inner circle. For instance, during the first summit in Riyadh, Dmitriev proposed discussions about joint exploration of Arctic resources. He also mentioned potential joint Mars exploration with SpaceX. Putin is leveraging Dmitriev’s strong connections with the Saudis, who have invested alongside RDIF, to influence Trump. It is beneficial that the Saudis are also anchor investors in Jared Kushner’s US private equity fund, Affinity Partners. Additionally, Dmitriev’s close ties with seasoned Western business leaders who have experience in Russia also aid him in conveying this message to the ultimate decision-maker, Trump.
Dmitriev returned from Washington last week and told Russian news agencies that Russia and the United States have made "three steps forward" after two days of consultations in Washington. He stated, new meetings between the US and Russia negotiation teams could take place as soon as next week.
Challenges to a Ceasefire
In Putin and Trump’s view, Ukraine and the European Union are the barriers to a ceasefire and normalized relations between the US and Russia. The EU will not unfreeze $210B—in Belgium—of the $300B Central Bank of Russia (CBR) foreign reserves unless the peace terms are acceptable to Ukraine first and then the EU.
One of Putin’s conditions for peace is the demilitarization of Ukraine. This is a non-starter for both Ukraine and the EU for several reasons, starting with Ukraine’s security needs. Trump stated that the US would not provide security guarantees to Ukraine, which means Europe would have to fill that vacuum. Ukraine, now the largest and most experienced military force in Europe, has also developed a formidable military-industrial sector in less than three years (a topic to be discussed in a future BWR newsletter). This military industrial base, together with the emerging manufacturing sectors in Poland and Romania, will be important centers of manufacturing and innovation as Europe ramps up its defense sector. For example, Ukraine’s Neptune cruise missile with a range of 1,000KM will continue to be manufactured in Ukraine and possibly Poland
Conclusion
Trump is pulling out all the stops to accommodate Putin’s ceasefire conditions, but Putin is not yet motivated. Trump went as far as excluding Russia from “Liberation Day” tariffs. A symbolic act and clear tell of Trump’s desperation for a deal.
Putin has sent Dmitriev, a polished new-generation Russian businessman, to persuade Trump with business deals and flattery.
Putin knows Trump cannot deliver without a European and Ukrainian agreement. Nevertheless, Putin will squeeze every concession out of dealmaker Trump.
Additional Reading(s)
PUTIN’S UNCONDITIONAL (WITH CONDITIONS) CEASEFIRE NEGOTIATIONS (Barbershop Whispers…Russia 31 Mar 2025)
Why Was Russia Spared from Trump’s Tariffs? (RussiaMatters, 03 Apr 2025)
ROOT CAUSE OF PUTIN’S WAR: SOVEREIGNTY AND AGENCY (Barbershop Whispers…Russia 24 Mar 2025)
Trump’s tariffs: Why are Russia and Belarus spared? (DW 06 April 2025)
Dividing Up the World - Leave Values at the Door (Barbershop Whispers…Russia 03 Mar 2025)
"What's in it For Me?" - War Plans & Peace Plans (Barbershop Whispers…Russia 08 Dec 2024)
Will Ukraine's Neptune long-range missile make a difference? (DW 21 Mar 2025)
Follow-ups & Quick Bites
Follow-ups
The Kremlin Prepares Mobilization of 160,000 Conscripts
According the Russian news agency Interfax, the Kremlin has ordered a mobilization of 160,000 new soldiers and has raised to conscription age to to 30 years old.
The new order, starting on 1 April and to be completed by July 15, comes at a time when ongoing negotiations for a ceasefire, led by the Trump administration, are stalling.
Ukrainian President Volodymyr Zelensky claims Russia is stalling the peace process and intensifying attacks on Ukrainian infrastructure and civilian targets. He also stated Russia is preparing for a new massive offensive.
Putin is in no hurry for a ceasefire and will continue to stall and push the envelope of US patience.
Additional Reading(s)
Russia stalls ceasefire talks as it intensifies attacks on Ukraine (Aljazeera 04 April 2025)
Quick Bites
Hegseth Will Not Attend the Ukraine Support Meeting
US Defense Secretary Pete Hegseth will not attend a gathering of 50 countries to coordinate military support for Ukraine. This will be the first time the coalition will meet without a US secretary of defense.
The group will meet on 11 April in Brussels and it will be chaired by Germany and Britain. Hegseth attended the last meeting in February, though he became the first U.S. defense secretary in the coalition’s 26 meetings not to lead it.
The Pentagon is unlikely to send any senior representatives in Hegseth’s place.
This action is a clear statement by the Trump administration that US support for Ukraine is unreliable and has expired.
Additional Reading(s)
Hegseth to skip multinational meeting on Ukraine support (Military Times 02 Apr 2025)
Musk Family Fawning Over Putin
In a BBC interview, Errol Musk, the father of Elon, said their family is impressed by Vladimir Putin
“As a family… we are a little bit in awe of Mr. Putin,”
During the interview, questioned the narrative that Putin launched the full-scale invasion of Ukraine in 2022, saying he believed the truth would come out “in time,”
According to his father, Musk recently complained that the war was plagued by “corruption, theft and fraud.” Clearly, he was not speaking about the corruption, theft and fraud taking place in Russia.
Additional Reading(s)
'It would be foolish not to admire Putin' — Elon Musk's father Errol swoons over Russian President (The Kyiv Independent 06 April 2025)
Vol 3, No 14 - BWR 06.04.2025
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