In recent discussions, Russia has sought to rekindle its economic ties with the United States, offering opportunities in sectors like metals, rare earth mining, and Arctic development. However, despite these overtures, the economic case for such cooperation remains weak, raising questions about the practicality of these proposals, particularly under the leadership of President Donald Trump.
Limited Economic Connections
Before Russia’s invasion of Ukraine, the economic ties between the U.S. and Russia were already tenuous. The two nations have long been rivals in global trade, particularly with China and Europe, making any substantial economic collaboration a difficult proposition. Despite this, Russia has been actively highlighting potential joint ventures to entice the U.S., hoping to influence negotiations surrounding the ongoing conflict in Ukraine.
Russia’s Pitch: Rare Earths and Aluminum
One of the most prominent offers from Russia involves the extraction of rare earth elements, a critical resource for American technology and military sectors. Russia’s President Vladimir Putin has expressed openness to cooperation, suggesting that joint projects could be pursued with U.S. private companies, not just governmental agencies. He also proposed resuming Russian aluminum exports to help lower prices in the U.S. market.
Putin’s comments were aimed at softening Washington’s stance as both countries navigate the complexities of the Ukraine war. At a high-level meeting in Saudi Arabia on February 18, the Russian delegation, led by Kirill Dmitriev — an influential economist with close ties to Putin — discussed these proposals. Dmitriev is known for cultivating relations with figures like Trump and Elon Musk, promising lucrative economic deals. While the U.S. did not send economic officials to the Riyadh talks, Treasury Secretary Scott Bessent hinted that sanctions relief could be on the table if a peace deal in Ukraine materializes.
Economic Realities: A Shrinking Trade Relationship
Trade between Russia and the U.S. has dwindled significantly, with U.S. exports to Russia barely surpassing $500 million in 2024. By contrast, Russian exports to the U.S. reached just $3 billion. This represents a stark drop from pre-war figures, where bilateral trade stood at $6.4 billion for U.S. exports and $29.6 billion for Russian exports in 2021.
American businesses have historically been reluctant to invest in Russia due to political risks and the uncertain business environment. Although the U.S. was the largest investor in Russia until the 2014 annexation of Crimea, its investments — including stakes in companies like Yandex and Ozon — represented only a small portion of the broader U.S. global investment portfolio. Meanwhile, Russian investment in the U.S. remains modest, totaling only $3 billion in 2022.
While some American companies might benefit from favorable access to the Russian market, it is unlikely that a full-fledged rapprochement with Putin would significantly alter the broader economic landscape for the U.S.
Rare Earths: A Complicated Proposition
Russia’s potential role as a supplier of rare earth elements is enticing, as the U.S. depends heavily on imports to meet its technology and defense needs. Yet, Russia’s share of global rare earth production remains limited, accounting for only 2% of supply despite its sizable reserves. Harsh environmental conditions make extraction costly, further complicating the feasibility of large-scale cooperation.
Experts are skeptical about the long-term viability of this offer. Maximilian Hess, founder of Enmetena Advisory, views Russia’s proposals as largely symbolic. While some in the Trump administration may entertain the idea, the likelihood of major Western companies investing in Russia’s rare earth sectors remains slim, given the risks involved in such politically sensitive projects.
Can the U.S. and Russia Forge an Economic Partnership?
The possibility of Russia and the U.S. forming a robust economic partnership to reshape global trade or economic rules appears unlikely. While Russia is keen on attracting foreign investment and boosting exports of high-value-added goods, its economic agenda conflicts with U.S. priorities, particularly in the fields of technology, intellectual property rights, and reshoring manufacturing.
Furthermore, the two countries are competing in several key sectors, particularly energy. Both are major producers of liquefied natural gas (LNG) and vie for market share in Europe, China, and India. Trump’s push to increase U.S. LNG exports to Europe faces competition from Russian energy supplies, a dynamic that has only intensified since Russia’s full-scale invasion of Ukraine.
In the Arctic, Russia’s plans to expand LNG shipments via the Northern Sea Route clash with U.S. priorities in the Canadian Arctic. While some might suggest that Russia’s shift away from China could benefit U.S. energy exports, such scenarios are speculative at best. Even if Russia were to cut energy supplies to China, those resources would likely be redirected to Europe, further complicating U.S. interests.
Conclusion: A Risky Gamble
In sum, while Russia’s proposals to engage in joint economic ventures with the U.S. may offer some attractive opportunities for select businesses, the broader economic impact is unlikely to be transformative. A full-fledged economic deal with Russia is not in line with the U.S.’s strategic interests, and any potential rapprochement under Trump may ultimately prove to be more symbolic than substantive.
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