Russia is dangling the prospect of major economic deals with the US, while pursuing its aggressive goals in Ukraine

• Russia is raising tantalizing economic deals with the US in Ukraine peace talks.
• Space, Arctic economic exploration, and energy are potential areas for cooperation.
• But it's not backing down in its goal of weakening and controlling Ukraine.

In talks to negotiate a cease-fire between Russia and Ukraine, President Donald Trump and Russian President Vladimir Putin are painting the prospect of a bright — and lucrative — future for US-Russia relations.

After their phone call last week, the White House said the two leaders discussed the "enormous economic deals" that could result from better US-Russia relations, with joint Arctic economic exploration, space projects, and mining all areas mentioned.

If the US lifts sanctions on Russia, its economy, the world's 11th largest, could again open up to American businesses and investors.

It's a prospect likely to appeal to Trump, a businessman known for his transactional approach to diplomacy who has also mused about his desire to win a Nobel Peace Prize.

US trade with Russia dropped sharply after Russia's 2022 full-scale invasion of Ukraine, with exports shrinking from $6.4 billion to $1.7 billion, while imports dropped to $14.4 billion, from almost double that.

However, some analysts warn that the deals Trump craves appear to be a long way off, and question the sincerity of Putin's overtures.

"Putin is happy to talk up business opportunities with Trump because he knows that they are good buttons to press to distract the administration from Russia's immediate goals in Ukraine," John Lough, an associate fellow in the Russia & Eurasia Programme at the Chatham House think tank in London, told BI.

He said that Russia will use prolonged negotiations to try to pursue its objectives, such as making sure Ukraine doesn't get security guarantees from its Western allies.

A lucrative reset?

Putin has reoriented the Russian economy over the last few years, with 8% of the country's GDP and 40% of government spending now tied to the military.

But cracks are emerging in an economy heavily propped up by the Kremlin's defense budget, with inflation and labor market shortages becoming increasingly problematic.

This means Putin may see benefits in the possibility of economic deals with Trump, particularly those that enable Russia to access the global financial system.

An end to or loosening of sanctions could see Russia open up to US investment and businesses, and also seek tech parts and other components vital to industries such as aviation or tech manufacturing.

In discussions in Saudi Arabia this week, US, Ukrainian, and Russian officials brokered a potential agreement to halt attacks in the Black Sea.

As part of this, the US said it had agreed to "help restore Russia's access to the world market for agricultural and fertilizer exports, lower maritime insurance costs, and enhance access to ports and payment systems for such transactions."

The move signaled an openness to break Russia's isolation from the global economy.

Even so, Paul Cormarie, a policy analyst with Rand Europe, told BI that Putin would struggle to transition Russia away from its wartime economy.

"As soon as the music stops, all the other factors aggravating Russia's economy will suddenly appear in the daylight," he told BI. "So there will have to be some sizable transition from a wartime to a peacetime economy that will be difficult if there are no opportunities for growth other than defense equipment."

Major obstacles remain

Putin has praised Trump for seeking peace in Ukraine. But he's also restated Russia's goals that Kyiv says amount to an erasure of Ukrainian sovereignty.

And despite attempts by the Trump administration to reset Russia-US relations, Lough said it's "hard to say how sustainable this situation will be."

"The Kremlin will remain suspicious of Washington's motives," he added.

Another serious obstacle to a proposed US-Russia economic bargain is China.

Trump has openly mused about pulling Russia away from China, which the Kremlin has relied on economically during the war. It's been a vital market for sanctioned Russian oil, and a source of consumer goods and tech — as well as diplomatic backing.

Putin and China's President Xi Jinping also share a long-term goal of overtaking US global power. Any moves by Russia to draw closer to the US are unlikely to be part of a long-term shift.

"In Moscow, Trump is seen as an anomaly for the US establishment from whom it might be possible to extract some short-term gains," Temur Umarov, a fellow at the Carnegie Russia Eurasia Center, wrote in March.

But he's also seen as someone who "it would be foolish to plan a long-term foreign policy shift" around, Umarov said.

Lough agreed, adding "Moscow is happily banking Trump's concessions on Ukraine but has no reason so far to believe that the US will cease to be a long-term challenge to Russian interests."

Ultimately, a major shift will have to go far beyond the level of words and discussions of potentially lucrative deals.

"That point will only be reached if newly established dialogue leads to the conclusion of a range of agreements," said Lough, including in areas of arms controls mirroring those brokered toward the end of the Cold War.