Considering Russian President Vladimir Putin was only using the 50-day deadline as an excuse to unleash more destruction on Ukraine, President Trump is right to shorten it to a little over a week.
Trump is also correct that, if Putin doesn’t agree to peace, sanctions can deal as strong a blow against Russia as missiles.
Despite the claims of Russia apologists, the war is bringing the country to its knees. Signs point to an economic catastrophe in the next 12 to 18 months.
Even senior Russian officials are issuing stark warnings. Russia’s Minister for Economic Development Maxim Reshetnikov recently warned that Russia faces recession.
But the reality is far worse. With the official inflation rate above 10% per year and the real inflation rate double that, prices of basic goods like potatoes, a staple for Russian families, are up three to four times since the Russian invasion in February 2022.
Government spending on defense is officially over 40% of the national budget and in reality more like 50% — crowding out on education, infrastructure and health care.
While war spending has propped up the economy in the short term, in the long term it is burning billions of rubles in an ever-deepening pit: There is no benefit whatsoever to the average Russian consumer.
Government tax revenues are falling due primarily to lower prices for Russian oil and natural gas, as well as the widespread destruction of key infrastructure such as refineries by Ukrainian drones.
Russia’s National Wealth Fund, which has been used to help underwrite the war, is estimated to have fallen from over $110 billion in early 2022 to just over $30 billion today. Swedish economist Anders Aslund, a former fellow at the Atlantic Council, believes the fund will be out of money by year’s end.
Meanwhile, international sanctions have made everything from aircraft parts to computer chips much more costly and hard to find outside the black market. Without China’s supply of massive quantities of dual-use technologies, both Russian industry and the Russian military would be paralyzed today.
The Russian invasion also accelerated the biggest long-term driver of Russia’s economic downturn: an ongoing demographic disaster. According to official statistics, which are almost certainly underestimates, Russia lost almost 600,000 people in 2024 and deaths now outnumber births by 5 to 3.
By 2030, the country is projected to face a labor shortage of 11 million people.
These dynamics have the Russian economy hurtling toward economic meltdown. Personal and commercial indebtedness are at all-time highs. A surge in consumer and business loan defaults has caused three of Russia’s largest banks to recently request government bailouts, with more such requests coming.
ACRA, a Russian credit rating agency, warns that as much as 20% of the loans on the books of Russian banks will be nonperforming by the end of this year, with the problem growing significantly worse in 2026.
Entire industries, especially those outside the military-industrial base, face widespread bankruptcies. Russia’s Deputy Energy Minister Dmitry Islamov stated recently that over 25% of Russia’s coal companies are insolvent, with many more facing forced consolidation.
Unsurprisingly, the tourism industry has been devastated, with a 95% reduction in foreign tourists since 2022.
Also, Russia’s factories are being converted from consumer goods such as cars and washing machines to produce drones or tanks. These conversions are expensive and often ineffective. They also gut the future of Russia’s non-military industrial base.
Russia’s semiconductor industry, years behind the West even before the invasion, is also now in dire straits. The outmigration of more than 1 million young people since February 2022, many well-educated professionals in the technology sector, has had an enormous impact.
Now the very real threat of 500% US tariffs on countries that support Russia’s war effort (such as China and India, which together buy more than 80% of Russian crude oil exports) may push the Russian economy over the edge.
The Russian Tariff Bill has 85 Senate co-sponsors and a solid bipartisan majority in the House.
If Putin rejects Trump’s 10- to 12-day deadline, as he has every other ultimatum, signing the Russian Tariff Bill into law is the single best thing Trump could do to bring peace to Ukraine
It will force Putin into a binary decision: Make peace or face a national economic catastrophe.
This is the choice Ronald Reagan forced Soviet leader Mikhail Gorbachev to make back in the late 1980s. Reagan understood that peace only comes through strength. He would tell us, “Sign the sanctions bill.”
Gregory W. Slayton is a former senior US diplomat, chairman of Slayton Capital and author of “Portraits of Ukraine a Nation at War.”
This story originally appeared on NYPost
