President Trump’s rollback of the additional Russia sanctions announced by UN Ambassador Haley signals more than just an unwillingness to add more Putin pals to the Treasury Department’s black list.  It also undercuts the threat that Treasury will exercise its Congressionally-mandated discretion to bar US banks from doing business with foreign banks that facilitate significant transactions with already blacklisted Russians. When rolled out on April 6, that specter alone caused the ruble to fall 4.5 percent against the dollar and the stock of Oleg Derepaska’s aluminum company to lose half its value overnight.  Since the entities that could likewise lose their access to the global financial system include the company that Russia uses to make the arms sales it needs to finance its development of new weapons systems, these sanctions had the potential to bite. 

But the President’s relapse suggests that Treasury’s bite may soon be reduced to just more Trumpian bark.  The markets seem to think so.  The ruble rose 1.3 percent on the news.

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