Putin Smells Blood in the Water on US Black Sea Deal

There’s at least one piece of advice Donald Trump gave in his book The Art of the Deal that anybody who’s ever had to negotiate anything would agree with: “Know when to walk away from the table.” When it comes to the partial ceasefire deal he’s trying to strike with Russia in the Black Sea, it’s time.

A read of the US and Russian statements issued after an agreement was supposedly reached makes clear that it wasn’t. Even Trump has expressed rare frustration with Vladimir Putin’s tactic of adding a range of pre-conditions to his supposed yes. “It could be they’re dragging their feet,” he said in a Newsmax interview, going on to recall how he, too, used to do this kind of thing when he wasn’t sure he actually wanted to make a deal.

That’s the kindest interpretation. The reality is that US negotiators are being played. As Bloomberg News has reported, the Kremlin sees the agreement to ensure safe navigation in the Black Sea as a way to break the international sanctions regime that has hamstrung its economy and revenue since the start of its February 2022 invasion of Ukraine. A second goal is to divide the Western alliance that united against it.

Putin knows Ukraine will find it extraordinarily difficult to agree to its conditions, and that a refusal makes it likely the US will again suspend arms shipments and intelligence sharing in punishment, enabling further Russian breakthroughs on the battlefield. He knows, too, that most European leaders will resist lifting sanctions. Some have already made that explicit, insisting that the sanctions imposed to punish Putin’s invasion should be lifted only when he ends it.

The key is that Trump needs Europe’s cooperation to meet a number of those conditions, in particular restoring Russian banks to the Brussels-based Society for Worldwide Interbank Financial Telecommunication international clearing system, known as SWIFT.

So the US administration now needs to decide whether to accept Russia’s conditions and clash head on with Europe, or reject them and try to pressure Putin in ways it’s been unwilling to so far. Taking on Europe would get ugly fast, especially for the old continent, because Hungary could finally block the renewal of the European Union’s sanctions legislation that excludes most Russian banks from SWIFT. Some others would undoubtedly step into Prime Minister Viktor Orban’s slipstream to get a jump on restoring economic ties with Moscow.

There are several reasons for Trump to walk away. The first is that this agreement is no more than an amuse bouche before the battlefield ceasefire that matters. There is already very little fighting in the Western Black Sea , because Ukraine has driven Russia’s navy out of it. Ukraine’s grain exports are near prewar levels and Russia’s are higher still. True, a ceasefire on shipping would lower insurance costs for both sides, but those gains would be marginal.

Ukrainian officials say it's also unclear to them whether the deal as agreed between the US and Russia would cover Mykolaiv, an important sea port at the mouth of the Bug river that's been closed since the start of the war, or indeed port infrastructure in general — as opposed to just shipping. So, this is a maritime nothing-burger.

The Russian conditions, by contrast, would have a significant impact. That isn’t, as implied by Russia’s statement, because they would lift sanctions on agricultural products and Russia’s ability to transact them. Food products are already exempt and flow freely. What the conditions would do is allow sanctioned Russian banks and companies to resume funding operations more widely, including for the Russian war effort in Ukraine. All they need do is claim to be “involved” in food-related trade.

A second reason to walk away is that Putin’s conditions would — yet again — give away something for nothing when it comes to negotiating an end to the war, this time also erasing much of Trump’s leverage to score even the lopsided ceasefire he seems to favor in what is, in reality, an attempt to reset US-Russia relations. Sanctions relief is the strongest card he has to play; by granting access to SWIFT he’d be giving much of it up before talks on a substantive ceasefire have even begun.

Moreover, Putin has succeeded in packaging the Black Sea ceasefire with one to end air strikes on energy infrastructure, meaning that a second appetizer to a truce on the ground is now also subject to Putin’s list of conditions. Small wonder, then, that the response within Ukraine to the unfolding negotiation has ranged from incredulous to furious.

There was another very relevant piece of advice in The Art of The Deal that Trump should take as a note-to-self as he considers Putin’s poison-pill conditions: “The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.” When it comes to the Black Sea ceasefire, there’s blood in the water.