EXECUTIVE SUMMARY: Russian-US relations have reached their lowest point since the end of the Cold War. President Donald Trump has signed a new package of anti-Russian sanctions into law and increased the US military presence across former Soviet territory and eastern Europe. He also sent VP Mike Pence on a tour of Estonia, Montenegro, and Georgia – a trip viewed by Moscow as western encroachment on an area it considers a buffer zone. This standoff does not mean the two superpowers will not be able to find common ground in other areas, but the potential for cooperation is limited. Former Soviet territory will likely remain a major confrontation line between the US and Russia.
Recent tensions between Moscow and Washington could drive the two superpowers to a deadlock. On July 30, Russia retaliated against the US by ordering 755 American diplomats to leave the country. Moscow’s move came after Washington toughened its own anti-Russia sanctions (although the Russian move was intended more as a countermeasure against former US President Barack Obama’s expulsion of 35 Russian diplomats in late 2016).
Moscow cannot afford to impose serious countersanctions, as they would cause greater harm to the much-troubled Russian economy than they would to the US. Consider, for example, the case of NASA, which depends largely on Russian engines. Stopping their export could cause significant difficulties for the US aerospace industry, but for the Russian economy, it would represent a loss of approximately $1 billion in revenues in a couple of years.
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