It’s a national sport in Russia (where everything is weighted against U.S.) to speculate on the eve of US election what this or that outcome will mean for Russia. My piece rather continues this tradition (although in fact Russia matters for US way less than portrayed in media) /1
Frankly speaking, it’s only the nuclear weapons that still keeps Russia in the league of “great powers”.. And I like the idea that if Biden wins the election, Russia wouldn’t be his priority despite numerous bills with tougher Russia sanctions pending before Congress. /2
Nevertheless the consensus is that Russia policy under Biden (who is projected to win) would be generally tougher with new sanctions considered. His advisors advocated for blocking sanctions against Russian state-owned banks, so plausible that 1 or 2 banks would be designated. /3
But don’t expect too much from Biden on sanctions, at least in near term. He would be busy with internal issues. Potential START treaty extension will ease immediate pressure to use new sanctions. He would need time to rethink Russia sanctions & draw up comprehensive strategy. /4
Biden will also need to look at Russia’s behavior. Despite allegations of further election meddling, Russia has distanced from foreign-policy adventures typical for past years (in Belarus and Karabakh Moscow appeared to refrain from interventionist policies). /5
In case of new sanctions Promsvyazbank, a state-owned lender to defense and sanctioned companies, is the natural candidate for SDN designation. At the same time Sberbank, Russia’s largest bank with huge retail operations, will likely be insulated from blocking sanctions. /6
If Biden tries to restore relations with Europe, coordinated sanctions approach will make it less likely that US and EU agree harsh measures against Russia. There’s possibility that Biden will refrain from additional pressure on European companies involved in Nord Stream 2. /7
Democratic-led Congress may pass sanctions on Russia sovereign debt triggering exit of US (and many Western) investors from OFZ market. Following short-term shock Russia will adapt. As a compromise the law could include provision to revoke sanctions if Russia doesn’t meddle /8
Under Trump merchandise trade turnover b/w Russia and US grew from $23.2 bn in 2017 to $26.2 bn in 2019, according to Russian data. Trade in services would increase the figure for 2019 by additional $8 bn. Negligible amount for US, but fairly large for Russia. /9
Russia’s main exports to US are oil & oil products, palladium, iron & steel, aluminium, fertilizers and rocket engines. Main imports from US are civil aircraft, turbines and other equipment, cars, pharmaceuticals & medical devices. Any sanctions are unlikely to hit this trade./10
Many people also say Russian ruble gets hurt by Biden potential presidency. But in longer term Ruble and other EM currencies will likely win from reduced trade tensions globally and elimination of “Trump factor” adding volatility and unpredictability. /11
Russia is also believed to welcome a potential partial return to pre-Trump trade climate including renewed functioning of WTO Appellate body. /12
That said, Trump could still win the election as there are scenario paths for him to get Electoral college majority despite losing popular vote.. /13
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