How Trump Reinvents the Sanctions Game, Putin Turns It into a Performance, and China Cites International Law

For months, Donald Trump’s relationship with Vladimir Putin had been a performance of bluster and hesitation, of loud announcements and quiet retreats. But on this Wednesday, the posturing ended. The President of the United States decided to hit Russia where it is most vulnerable - at the heart of its economy, in oil. With one stroke of his pen, Trump cut the country’s two largest energy companies, Lukoil and Rosneft, off from the global financial system. A move that ended years of restraint and marked a new stage in the economic war against Moscow. The signal is unmistakable. After months of failed negotiations with Putin, of abandoned and unplanned meetings and diplomatic stagnation, Trump has now pulled the economic ripcord. It is a decision that embodies both courage and contradiction - courageous because it could hit Russia hard, contradictory because it could also shake the markets and drive up prices at American gas stations.

On October 23, 2025 (EDT), President Trump suggested waiting about six months to assess how devastating the impact of the new American oil sanctions - combined with the 19th European sanctions package - would be on Russia.

Only a few months ago, Trump had dismissed any form of sanctions against Russia as “ineffective.” Since taking office in 2025, he had not imposed a single new measure, while the Biden administration had previously targeted around 5,000 Russian entities - from banks to oligarchs to the central bank. Trump’s preferred tools were tariffs - coercive, commercial, symbolic. But this strategy failed. India and other buyers of Russian oil were unimpressed by Washington’s “secondary tariffs.”

Now comes the reversal. After the Budapest show and continued fighting in Ukraine, Trump reached for the sharpest weapon left to him. “I just felt it was the right time,” he said at the White House. With this, he breaks not only with the caution of his predecessors but also with the logic of his own policies. Since the beginning of the war in 2022, the United States and its G7 partners had largely spared the Russian energy system in order to prevent Europe’s dependence on Russian oil from turning into a global energy crisis. The new sanctions end that restraint. “Now the gloves are off,” said John E. Smith, the former director of the U.S. Treasury’s sanctions office.

“New sanctions will have ‘NO significant impact on our economic well-being.’ And as a reminder: during Trump’s first term, he had already imposed what was then the most extensive set of sanctions against Russia in U.S. history.”

Putin’s remark was less an analysis than an act of theater - a rhetorical impulse born of the need to project strength where vulnerability is visible. It was the language of a leader who knows his country is resilient in the short term but fragile in the long run. Behind the pose of steadfastness lies the quiet awareness that sanctions may not bite today, but they will tomorrow - slowly, stubbornly, and inevitably, like frost in the foundation of a wall.

Lukoil and Rosneft, together responsible for roughly half of Russia’s crude oil production, are not mere corporations - they are the financial arteries of the Kremlin. About 600 million dollars a day flow into Putin’s coffers from oil revenues, money that finances his war, his bureaucracy, and his propaganda. If that stream is interrupted, Russia’s economy begins to wobble. Earlier this year, analysts had warned that such a move could send global oil prices soaring. But the situation has changed. Inflation has eased, and the price of oil recently hovered around 59 dollars per barrel - 18 percent below last year’s level. Trump sees in this a window of opportunity: now or never.

China’s response to the new sanctions was a balancing act so finely tuned it could serve as a textbook example of strategic ambivalence. In Beijing, the Foreign Ministry condemned the U.S. measures as “unilateral” and “without basis in international law,” calling for dialogue instead of coercion, stability instead of escalation - the classic rhetoric of a nation that presents itself as the architect of a multipolar world but is already entangled in its own contradictions. Behind the scenes, however, China’s state companies responded not with pathos but with caution. The four oil giants - PetroChina, Sinopec, CNOOC, and Zhenhua Oil - temporarily suspended purchases of Russian seaborne crude, Reuters reported. Officially, it was not a break with Moscow, just an “operational reassessment.” In truth, it was a signal that China’s political solidarity ends where American financial power begins. Beijing knows that secondary sanctions can be more dangerous than open conflict - they operate invisibly, in payment systems, insurance contracts, and the credit lines of state banks. The result is a paradoxical image - a country that loudly protests Western pressure while quietly acknowledging the economic mechanisms behind it. China maintains the façade of independence, but internally the balance is shifting: away from ideological alignment with Russia and toward a cool, almost technocratic self-preservation. It is not capitulation but an art form of survival - diplomacy as a balancing act between pride and risk, between principle and price.

Ben Harris, former assistant secretary of the U.S. Treasury under Biden, calls the new sanctions “really significant.” The timing, he says, was deliberate: “Our strategy had always been to keep the oil flowing but control the price. Trump is breaking with that logic.” Shortly after the announcement, prices rose again - markets turned nervous. But inside the White House, there was a show of calm. Trump relies on the effect he loves most: the headline. And on the message behind it: that America is once again willing not just to declare power but to exercise it. For Russia, this is more than a symbolic blow. The sanctions strike at the core vulnerabilities of its energy giants - in financing, in trade, in the insurance networks of their tankers. Banks that continue transactions with Lukoil or Rosneft now risk being cut off from the dollar system. International institutions are already reviewing their exposure, investors are pulling back, and the ruble is under pressure.

Volodymyr Zelenskyy said the EU and U.S. sanctions against Russia were “a good signal to other countries” to join the measures and pressure Vladimir Putin to end the war in Ukraine.

Marshall Billingslea, a former Treasury official under Trump, put it bluntly: “This directly targets the hard currency that keeps Putin’s war machine running.” The International Monetary Fund expects Russia’s economic growth to fall to 0.6 percent this year - down from 4.3 percent the year before. The White House projects unity: the decision was coordinated with the United Kingdom and the EU, which have also announced new sanctions against Russian energy companies. A rare phase of transatlantic harmony - at least on the surface. Behind closed doors, skepticism remains: will Trump enforce these sanctions if they start hurting American consumers?

The president has an ambivalent relationship with economic punishment. During his first term, he used it with brutal force against Iran - and boasted of bringing Tehran to its knees. Yet at the same time, he warned that too many sanctions could “kill the dollar.” They would push other nations to seek alternatives - digital currencies, BRICS alliances, independent payment systems. Russia is already experimenting with cryptocurrencies and pushing for a common BRICS settlement network to reduce its reliance on the dollar.

Trump himself spoke about this dilemma last year at the Economic Club of New York: “I want to use sanctions as little as possible. I impose them, and then I take them off again.” It is a credo of pure power play, one that allows him to display strength without commitment. But this time, it might be different. Edward Fishman, a sanctions scholar at Columbia University, calls the move “a genuine turning point.” The reason: the dollar is involved in 90 percent of all global foreign exchange transactions - meaning anyone doing business with Lukoil or Rosneft can hardly avoid the U.S. system. “The success of these sanctions depends on how toughly the U.S. punishes Chinese banks and Indian refiners that continue to trade with Russia,” says Fishman. “If Trump has the nerve to follow through on that threat, it would be a geopolitical earthquake.”

In the end, a paradox emerges: the very president who mocked sanctions and courted Putin for years may now be the one to bring the Kremlin’s economy to its knees. Not out of principle, but out of spite. Not out of strategy, but out of wounded pride. Trump’s new Russia sanctions are not a moral program; they are a show of power. Yet sometimes, in the logic of history, even that is enough to change something - though with Trump, that too could change again by the next day.

To be continued .....