Why Trump and Putin didn't discuss the elephant in the room

In President Trump’s first conversation with Vladimir Putin since the US president took office earlier this month, it doesn’t appear the two leaders talked about a subject on the minds of much of Russia, Europe, and the United States: the sanctions against Russia.

Statements from the White House and Kremlin did not mention the penalties imposed against Russia for its annexation of Crimea in 2014, its alleged sponsorship of a separatist war in Ukraine, and its alleged meddling in the US presidential election. An anonymous official in the White House, responding to a question later Saturday, acknowledged sanctions were not among the topics the two presidents discussed in their phone call that day.

As Mr. Trump’s predecessor, Barack Obama, left office, US-Russia relations reached their worst level since the Cold War. Trump has vowed to reverse that, previously expressing a willingness to do so through the easing of sanctions. Russia is particularly eager to have these penalties that have hampered its economy and hurt some of its most powerful businessmen eased. Under pressure from European leaders and influential politicians on Capitol Hill, however, Trump has indicated he is a long way away from making that decision.

"As far as the sanctions, (it is) very early to be talking about that," Trump said on Friday in a joint news conference with British Prime Minister Theresa May. The president also insisted that he wanted to follow through on his campaign pledge to pursue better relations with Russia.

Following Russia’s 2014 annexation of Ukraine’s Crimea region and its alleged sponsorship of the separatist war, the US implemented penalties against Russia’s financial services, energy, mining and defense, as well as personal sanctions against Putin’s inner circle. Among the most damaging to Russia were limits on its energy companies and its ability to secure loans.

Coupled with falling oil prices and a weak ruble, the sanctions have dealt a hard blow to Russia’s economy. The country’s sovereign wealth fund had $87 billion in assets in December 2013, according to the Russian Finance Ministry. As of June 1, the fund was down to $38 billion, following sell-offs by the Russian government to make up for budget deficits.

Then, in former President Obama’s last days in office, he imposed more sanctions on Russia in response to accusations that the Kremlin orchestrated the theft of emails from the Democratic National Committee and meddled in the US presidential election. Mr. Obama also expelled 35 Russian diplomats.

But Trump has said having a good relationship with Russia is “a good thing, not a bad thing,” adding “only ‘stupid’ people or fools” would come to a different conclusion.

Yet, neither he nor Putin in their phone call on Saturday discussed the sanctions. Instead, their offices talked about the Middle East and threats to global stability.  

They discussed "a range in topics from mutual cooperation in defeating ISIS to efforts in working together to achieve more peace throughout the world including Syria," a White House statement said, using an acronym for the militant group.

According to the Kremlin, Putin and Trump spoke about international issues, including the fight against terrorists, the Israeli-Palestinian conflict, Iran's nuclear program, the situation on the Korean peninsula and the Ukraine crisis.

Even though sanctions didn’t come up, Russia and its economic sector responded optimistically. Kirill Dmitriev, chief executive of the government-run Russian Direct Investment Fund, told the RIA Novosti news agency the meeting is a “positive signal for business and investors and envisions possibility to restore cooperation between our countries, including in the sphere of investment,” according to RT, formerly Russia Today. Shortly after the call, the fund announced it had arranged 10 projects it hoped could draw American investments to Russia, and that it planned to open an office in New York in May, according to The New York Times.

Trump is under mounting pressure in Washington and from Europe not to ease sanctions. When Ms. May met with Trump on Friday, the British prime minister told reporters sanctions should continue until Putin carries out the requirements in a ceasefire agreement arranged in Minsk, Belarus in 2014. French President François Hollande also urged Trump in a phone call not to lift sanctions against Russia, according to his office.

Republican leaders have said much of the same to the president. Republican Sen. John McCain of Arizona, a longtime critic of Mr. Putin, threatened to codify sanctions against Russia into law if President Trump lifts them. Senate Majority Leader Mitch McConnell also said he would support bipartisan legislation requiring the sanctions stay in place, according to the Times.

Trump and Putin’s first conversation also comes as American authorities are reviewing contact between Trump’s inner circle and Russia. The Federal Bureau of Investigation reviewed an intercepted postelection conversation between Trump’s National Security Adviser Michael Flynn and Russian ambassador Sergey Kislyak, according to The New York Times. American authorities are also investigating links between Russian officials and associates of Trump, including his former campaign chairman, Paul Manafort.

This report contains material from the Associated Press and Reuters.