Trade Idea: Will Trump increase sanctions on Russia before June?
Market: Will Trump increase sanctions on Russia before June?
Trade: No
Current Odds: 46%
Return: 118%
Resolved by: End of May (2 months)
Position Size: Medium
Hey all and welcome back to the Poly. Last week was a tough week to find value on Polymarket; lots of volatility and new markets being resolved within hours or days as Trump’s tariffs took the world by storm. The tariff situation seems to be calming down, and value-trade opportunities are slowly coming out of the woodwork. Today we’re looking at the Russian sanctions market.
The opening months of 2025 have seen President Trump's administration take a distinctive turn in handling Russia's ongoing Ukraine conflict. Unlike his predecessors, Trump has placed diplomatic solutions at the forefront, even as he publicly threatens Moscow with severe economic consequences. Just last month, he warned of "devastating" banking restrictions and tariffs, yet his actual policy moves tell a different story - one where negotiation takes precedence over economic pressure. This shift in America's sanctions approach has become a defining feature of the current geopolitical moment, as the White House pursues what it believes could be an endgame to the long-running war.
Negotiation Over Coercion
Since returning to the White House in January, Trump has approached the Ukraine conflict with his trademark dealmaker's eye rather than through traditional diplomatic channels. He doesn't see Russia's actions as a moral crisis demanding punishment - to him, it's simply a "bad deal" that needs better terms. This was crystal clear during his March showdown with Moscow, where his warnings of "very unpleasant" sanctions came alongside a straightforward offer: a 30-day ceasefire on the table, right now. "Russia has no way out but cease-fire. If needed we will sanction it, but I hope we won't need to," he stated plainly. The message isn't subtle - in Trump's playbook, economic threats are just bargaining chips to get everyone to the negotiating table, not the main strategy.
Trump's Black Sea ceasefire pitch in March revealed his playbook in action. While publicly framed as requiring Russia to make concessions, behind the scenes it was a different story. Kremlin officials made it clear they were only at the table because of promised sanctions relief for banks handling agricultural exports. Ukraine quickly denied agreeing to such terms, but Trump's team seemed open to the idea - with the Wall Street Journal reporting that American negotiators considered easing sanctions crucial to getting Russia's cooperation. This approach isn't unique to Ukraine - we saw it back in January when Trump lifted sanctions on Israeli settlers in the West Bank even as Gaza violence continued. It's becoming his signature move: dangling sanctions relief as the carrot to get what he wants at the negotiating table.
Ineffectiveness of Existing Sanctions
Trump's reluctance to pile on more sanctions stems from a simple observation: Russia has weathered the economic storm remarkably well. Despite being hit with over 20,000 sanctions from the U.S. and its allies since 2022, Russia's economy grew by 3.6% last year. They've adapted by ramping up military production, sending energy exports east to Asian markets, and assembling a shadow fleet of tankers that sidestep G7 price caps. Trump didn't mince words about this on March 7, saying bluntly, "Russia's still standing, still fighting—sanctions didn't stop them before, why waste time now?" In his view, why double down on a strategy that clearly hasn't delivered the knockout punch many expected?
Biden's parting shot in January hit 250 Russian energy and financial entities, including Chinese companies helping Moscow dodge restrictions. But Trump's people argue we've reached the ceiling of what sanctions can accomplish. As Atlantic Council's Kimberly Donovan put it, "Further secondary sanctions risk alienating neutral states without materially altering Russia's war capacity." Russia has simply adapted too well - they've built their own payment system called SPFS and ramped up crypto usage to work around conventional banking channels. The economic squeeze play that looked so promising in 2022 has lost much of its punch as Russia found ways to live with the pressure.
The “America First” Mandate
Trump rode back to the White House partly on Americans' growing weariness with foreign entanglements and pocketbook concerns. His core supporters largely see Ukraine support as money down the drain - a February Pew poll found 68% of Republicans against sending more funds. By presenting sanctions relief as a way to save cash while speeding up peace talks, Trump neatly ties his Russia approach to what his voters want. He summed it up plainly on March 7: "Why pour more money into sanctions paperwork when we can get a deal done?" It's a message that resonates with supporters who'd rather see resources directed toward problems at home.
Trump's running against the clock with the EU's next sanctions review coming up in June. The timing creates both pressure and opportunity - experts think he'll use this deadline to squeeze concessions from Moscow and Brussels simultaneously. The play? Possibly offering to hold off on new penalties if Russia commits to a ceasefire, while also getting the EU to sign off on limited sanctions relief. It's classic Trump wheeling and dealing, but without rock-solid enforcement behind it, there's real concern this approach could just hand Putin more leverage. The question becomes whether Trump can transform this time crunch into the breakthrough he's been promising voters.
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