Key Points – Further economic sanctions against Russia are a failed strategy, representing Western “political exhaustion masquerading as resolve” rather than a path to victory in Ukraine.
-After more than three years of war, Russia has successfully adapted its economy by reorienting trade towards Asia, using non-Western currencies, and developing sanctions-resistant supply chains.
-New sanctions will likely be met not with panic, but with calculated gray zone retaliation and an acceleration of Russia’s consolidation of its gains in Ukraine.
-The West mistakes this symbolic punishment for a coherent policy, while Russia, with a clearer view of reality, continues its attritional war.
Congress Plays Politics, Putin Plays for Keeps in Ukraine
Let’s dispense with the fantasy right off the bat: Russia isn’t trembling at the prospect of new sanctions. Not now. Not after more than three years of war, hundreds of billions in Western aid to Ukraine, multiple tranches of punitive economic measures, and an endless cycle of condemnations and diplomatic theater. If Congress moves forward with another sanctions package this summer – as seems increasingly likely – Moscow won’t respond with panic. It will respond with calculation. Cold, strategic, and utterly unimpressed.
There was a time, not so long ago, when the United States believed sanctions could shape Russian behavior. That era is over. If it ever existed at all, it ended in the wreckage of Western assumptions outside Bakhmut, in the charred remains of NATO-supplied armor near Avdiivka, and in the Kremlin’s growing confidence that time – and the strategic geography of Eurasia—is on its side. Washington continues to act as if economic punishment is a form of strategy. But from the Kremlin’s point of view, sanctions no longer signal strength. They signal political exhaustion masquerading as resolve.
The sanctions game has become an end in itself. Each new package is framed as another righteous blow against Russian aggression, another notch in the belt of American virtue. But beyond the self-congratulation, what exactly has changed? Russia’s war effort continues. Its economy, while bruised, has adapted. It sells its energy eastward now, not westward. It trades in yuan and rupees. It builds parallel systems, reroutes supply chains, and weathers the storm with the kind of stoic determination that Washington once dismissed as propaganda. It’s not that sanctions have no effect—they do—but they no longer have the kind of leverage that might shift the course of the war or fracture the elite consensus around Putin’s leadership. If anything, they’ve had the opposite effect: reinforcing the Kremlin’s siege mentality, validating its narrative of Western encirclement, and hardening domestic resolve.
What’s more, Russia has built institutional and political redundancies into its economy. Parallel import schemes, murky trade networks through the Caucasus and Central Asia, sovereign wealth funds insulated from Western pressure, and most importantly, a population increasingly inoculated against hardship. The liberal theory that economic pain necessarily produces political moderation was always suspect. But in the case of post-2022 Russia, it has proven downright delusional. The Kremlin has taken each blow and metabolized it – sometimes clumsily, often at great cost—but never in a way that derailed the war effort or forced a strategic rethink.
So when Congress passes its next round – targeting more banks, more oligarchs, more sectors of the Russian economy – what will Russia actually do?
It won’t just sit still. It will move, just not in the way the architects of sanctions hope. Russia will double down on what it’s already doing: deepening its economic ties with China and Iran, accelerating the de-dollarization of its trade, and expanding its partnerships with countries eager to remain outside the Western economic order. It will take each new sanction as proof that the post-Cold War era is over and that what lies ahead is a long-term contest of systems, not just a temporary dispute over Ukraine.
And don’t be surprised if Moscow hits back. Not with some grandiose retaliatory spectacle, but with sharp, targeted responses designed to raise the cost of confrontation without triggering direct escalation. It might manipulate energy flows, disrupt critical supply chains through opaque intermediaries, or even lean into cyber operations against softer Western targets. Not against U.S. infrastructure directly – at least not at first – but in ways that send a signal and create ambiguity. Russia has mastered gray zone warfare. And sanctions, especially when framed as punitive rather than strategic, invite precisely that kind of retaliation.
More ominously, Moscow could use the sanctions as justification to further consolidate its gains in Ukraine. The West still hasn’t come to terms with this basic reality: large parts of Ukrainian territory are now effectively integrated into Russia’s political and administrative system. The Kremlin doesn’t need another reason to make those gains permanent—but another round of American sanctions might offer a convenient excuse. Expect formalized annexation, more Russian passports, more ruble-based transactions, and a legalistic sleight-of-hand that presents occupation as reunification. Sanctions won’t deter this. If anything, they will accelerate it.
There is also the question of signaling. Sanctions are not just tools of coercion – they are also declarations of intent. And here, the message is garbled. The United States wants to appear tough but not escalatory, resolute but not reckless. Yet from Moscow’s perspective, the pattern is clear: the West, unwilling to commit the manpower or resources required for a decisive Ukrainian victory, falls back on sanctions as a kind of moral palliative. That sends a message – not of resolve, but of strategic incoherence. Russia sees through the bluff. And it calculates accordingly.
All of this underscores a deeper problem: Western policymakers still cling to the illusion that economic pressure will eventually lead to political moderation. But Russia is not a liberal state gone rogue. It is not teetering on the edge of collapse. It is not one financial shock away from capitulation. It is a wartime state – disciplined, patient, and more capable than many in Washington care to admit. Sanctions, at this point, are not instruments of coercion. They are symbols. Symbols of a worldview that refuses to grapple with the limits of American power.
And that symbolism comes at a cost. Every new sanction reinforces the belief – shared not only in Moscow, but increasingly in Delhi, Ankara, and Brasília – that the United States uses its financial system as a weapon. That belief, in turn, drives the search for alternatives. Sanctions are supposed to isolate Russia. But in practice, they’ve accelerated the creation of a sanctions-resistant ecosystem. Not just for Russia, but for a growing number of states tired of navigating the arbitrary moralism of Washington’s rules-based order. We’re not isolating Moscow. We’re eroding the very system of dollar dominance we claim to be defending.
None of this is to suggest that the U.S. should capitulate to Russian aims in Ukraine. But we need to stop mistaking punishment for policy. The goal should be to shape the strategic environment, not simply to make a point. And shaping that environment means doing more than recycling old tools from the Cold War playbook. It means facing hard truths: that Russia will not be economically broken; that the war will not end with a financial whimper; and that future leverage will come not from Wall Street but from the gritty, unpleasant work of real geopolitical positioning.
If we’re serious about containing Russia’s ambitions – and deterring others from mimicking its model – then we have to move beyond the ritual of sanctions. That means investing in actual deterrence: building up military capabilities where they matter, supporting the resilience of vulnerable states, and making it clear that our commitment to the postwar European order is not just moral but material. Sanctions have become the substitute for this kind of strategic clarity. But they don’t change minds in the Kremlin. They don’t stop drones over Kharkiv. And they don’t bolster NATO’s eastern flank.
Congress will probably do what it always does: pass sanctions, declare victory, and move on. But the Kremlin will not be confused. It will see the gesture for what it is – more performance than policy. And it will act accordingly. Not with fear, but with quiet, deliberate confidence. Because in this war, as in all others, the side that understands reality best tends to win.
And right now, Russia has a much clearer view of reality than many in Washington do.
About the Author: Dr. Andrew Latham
Andrew Latham is a non-resident fellow at Defense Priorities and a professor of international relations and political theory at Macalester College in Saint Paul, MN. You can follow him on X: @aakatham.
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