Wednesday , December 13 2017

Trump signs ‘Russia sanctions’ – Moscow takes over US compound

WASHINGTON, Aug 2, (Agencies): US President Donald Trump has signed legislation imposing new sanctions on Russia into law, a White House official said on Wednesday.

The US Congress voted last week by overwhelming margins for sanctions to punish the Russian government over interference in the 2016 presidential election, annexation of Ukraine’s Crimea and other perceived violations of international norms.

Trump, who has made clear he wanted to improve relations with Russia, grudgingly accepted the new congressional sanctions, which also included Iran and North Korea. The bill had enough support in Congress to override a presidential veto.

Trump’s signing of the bill followed some conflicting signals from the administration in recent days about the sanctions.

US Secretary of State Rex Tillerson told reporters on Tuesday that he and Trump did not believe the new sanctions would “be helpful to our efforts” on diplomacy with Russia. Vice President Mike Pence said that the bill showed Trump and Congress were speaking “with a unified voice.”

White House adviser Kellyanne Conway confirmed the signing during an interview with Fox News.

Trump’s desire for better relations with Moscow has been hamstrung by findings of US intelligence agencies that Russia interfered to help the Republican against Democratic presidential candidate Hillary Clinton. US congressional panels and a special counsel are investigating. Moscow denies any meddling and Trump denies any collusion by his campaign.

The Russian rouble weakened slightly following the initial report that Trump had signed the bill.

Meanwhile, Russian authorities on Wednesday took over a summer-house compound in Moscow leased by the US embassy, five days after the Kremlin ordered Washington to slash its diplomatic presence in Russia.

In retaliation for new US sanctions, President Vladimir Putin has ordered the United States to cut around 60 percent of its diplomatic staff in Russia by Sept. 1, and said Moscow would seize a dacha country villa used by US embassy staff and a warehouse.

US employees cleared out the dacha on Tuesday and a Reuters journalist who visited the property on Wednesday saw a large metal padlock securing the front gate.

Cleared

The one-storey building and courtyard, previously used by diplomatic staff at weekends and to host embassy parties, was empty and cleared of barbecue equipment and garden furniture.

Two policemen in a car in front of the main entrance said they had been instructed to guard the property and did not expect any visits from US or Russian officials.

Tillerson said Tuesday he will meet with his Russian opposite number Foreign Minister Sergei Lavrov over the weekend, but warned US-Russia ties could still get worse.

Some in Moscow and Washington had hoped relations between the former Cold War foes might improve under US President Donald Trump, who has had warm words for President Vladimir Putin.

But the great power rivals remain divided over Russia’s intervention in Ukraine, US sanctions against Kremlin allies and Moscow’s support for Bashar al-Assad’s Syrian regime.

Tillerson has never tried to sugarcoat the problems, and admitted in March after a visit to the Kremlin that ties were at a “historic low” with little sign of improvement.

Meanwhile, Russian leader Vladimir Putin is unlikely to risk an escalating round of tit-for-tat sanctions with Washington because the only measures that would hurt the United States would also endanger Russia’s fragile economic recovery.

Though an eye-catching gesture, Russia’s response does not pack the same punch as the US penalties, which target Russian energy projects, make it harder for US President Donald Trump to ease earlier sanctions, and could further restrict lending to Russia.

That partly reflects the fact that Russia has relatively few ways of hurting the United States, whose economy is around 14 times larger than Russia’s.

It also reflects worries in the Kremlin about the health of the economy ahead of a presidential election in March.

In 2014, when the United States and European Union imposed an earlier round of sanctions over Moscow’s annexation of the Crimea peninsula from Ukraine, the Kremlin’s main response was to limit Western food imports, a comparatively soft measure.

“It was a case of the head overruling the heart and I expect exactly the same response this time,” said Chris Weafer, senior partner at Macro-Advisory consultancy in Moscow. “Something which will cause some discomfort for the US but which will not derail the Kremlin’s efforts to attract international investors and grow the economy.”

Weafer said Putin would probably take further retaliatory steps against Washington after Trump signs the new sanctions into law but he did not think the Kremlin would target US firms with close ties to Russia.

Putin has not said whether he will fun for a fourth presidential term in 2018, but officials expect him to do so.

Whereas Putin oversaw several years of growth above 5 percent in his early presidential terms, the Russian economy contracted in 2015 and 2016 and is seen growing only 1.4 percent this year.

Putin needs a strong economy if he is to win a convincing mandate, and the Kremlin has tried to show that Russia is open for foreign business despite tensions with the West.

Domestic Russian investors have only cautiously increased investment as the economy has recovered from recession, making foreign inflows more important.

An adviser to Putin, ex-finance minister Alexei Kudrin, told Reuters last week that domestic investors needed certainty that sanctions would not continue to be ratcheted up, otherwise the economic outlook would be weak.

Putin said in an interview aired on state TV on Sunday that Russia could restrict cooperation with Washington in “areas which would be sensitive to the American side” but he did not think that was yet necessary.

“That would not only hurt Russian-American relations, it would also inflict some damage on us,” Putin said.

Analysts cite energy and aviation as two sectors where Russia and the United States work closely and where Russian penalties could affect US firms.

 

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