Impoverished Kremlin between China and the United States

As the United States shifts attention toward more actionable foreign-policy tracks — including pressure on Iran and the launch of the “Board of Peace” initiative (1) — the Kremlin is seeking to use the diplomatic window to lobby Washington for economic agreements in order to ease mounting economic pressure, without abandoning its aggressive policy or maximalist positions.

The Russia — Ukraine — U.S. talks in Geneva on February 17–18 also demonstrated a blend of Kremlin outward restraint, an attempt to move the discussion into the realm of economic “trade-offs” with the United States, and, at the same time, the preservation of harsh military rhetoric. Taken together, this points to Moscow’s lack of readiness for a real compromise and its effort to use dialogue primarily as an instrument for sanctions and political bargaining.

This tactic stands out amid rising U.S. pressure on China and Beijing’s backlash over U.S. actions in Venezuela, Iran, and the Arctic — areas of direct Chinese interest. China relies on discounted imports from sanctioned states, while Russia, after years of war against Ukraine and confrontation with the West, has become structurally dependent on Chinese capital and trade. U.S. pressure only deepens Moscow’s reliance on Beijing, forcing a choice between becoming China’s long-term resource appendage or changing course to reopen limited engagement with Washington. Now the Kremlin is tilting toward China, showcasing a planned Putin visit and amplifying it through propaganda. Moscow is trying to balance between Beijing and Washington while continuing militarization — but the effectiveness of this strategy remains extremely limited.

Against the backdrop of growing domestic dissatisfaction with the economic situation, Russian propaganda had to temporarily step back from large-scale attacks on the U.S. president and accusations of “sanctions escalation” and a “war against tankers,” themes that Foreign Minister Sergey Lavrov (2) and other voices had emphasized earlier. “We remain interested in resuming trade, economic, and investment cooperation with the United States. It can truly be mutually beneficial,” presidential press secretary Dmitry Peskov (3) articulated as the Kremlin’s central narrative on February 18.

Reuters, citing senior Western intelligence officials, reports that Moscow is not interested in a quick end to the war and is using talks with the United States primarily as a tool to soften sanctions and secure economic agreements. Volodymyr Zelenskyy spoke about a “large-scale economic deal” proposed by Moscow, designed to appeal to Donald Trump and preserve the loyalty of Russia’s business elites (4).

The Economist writes that Russia’s Security Council, ahead of a meeting between the U.S. and Russian presidents in Alaska, prepared a memo on how to present the American side with “the Greatest Deal,” and that Moscow promised the United States deals “worth $12trn” in exchange for sanctions relief (5). The document referenced a “treasure trove of Arctic and northern resources,” up to 12 billion barrels in Western Siberia, and up to 50 billion barrels in the Arctic. The outlet itself underscores that the idea of a “$12trn prize” is “plainly hyperbole designed to please Mr Trump.”

The economy remains one of the Kremlin’s key domestic-political vulnerabilities and a core issue for Russians. A January poll by the independent Levada Center (6) recorded a deterioration in socio-economic assessments: the share of respondents who consider the economic situation bad rose by 7 percentage points from September 2025 to 22%, while the share of positive assessments fell by 9 points from May 2025 to 19%. Fifty-eight percent assess the political situation as tense or critical, 6 points higher than in May 2025, while the share of positive assessments fell by 7 points to 39%. Key February topics in Russian social media include a sharp increase in housing-and-utilities (communal services) costs — which even the authorities were forced to acknowledge, calling it a “price adjustment” (7) — as well as a steep rise in cucumber prices as a symbol of broader cost-of-living increases. Inflation in January accelerated fivefold to 1.62% versus 0.32% in December — primarily due to cost pressures from raising the value-added tax from 20% to 22% (8). The Central Bank reported that business activity fell to its lowest levels since 2022: the business climate indicator, calculated monthly from a survey of roughly 15,000 enterprises, was 0.2 points in February (zero separates growth from contraction) after 1.5 points in January, 2.5 in December, and an average of 3.2 in 2025 — the weakest reading since October 2022, when business activity declined after the “partial mobilization” and the indicator hit minus 1.1 points (9). Rosstat also reported in February that 21 of 28 major industrial sectors ended last year in the red (10).

Public-opinion dynamics also underscore the importance of the sanctions factor. According to a January Levada Center (11) poll, the share of respondents concerned about sanctions rose by 9 points from February 2025 to 35%. Belief in their “positive effect” fell by 9 points from May 2024 to 53%. The share of respondents who believe sanctions cause significant damage rose by 10 points from May 2024 to 19%.

Vladimir Putin’s demonstrative focus on the economy during a meeting with government members on February 18 — held against the backdrop of talks with Ukraine and ahead of the “Board of Peace” — was widely amplified by national pro-Kremlin media. Putin separately mentioned the need to call Central Bank Governor Elvira Nabiullina, who was on a business trip — and this reference to the economic agenda was broadly quoted by Russian national propaganda outlets(12). On February 20, presidential press secretary Dmitry Peskov (13) noted that Putin and Nabiullina saw each other during the visit of the President of Madagascar: “They had an opportunity to speak on the sidelines — work matters”. Kremlin propaganda consistently emphasizes the focus on economic issues and the purported efforts of the Kremlin and the Russian government to address them.

Geneva Talks: Neutral Rhetoric and Maximalist Goals

Regarding the talks with Ukraine themselves, the Kremlin adopted a demonstratively neutral posture — something that was apparent from the appointment of Vladimir Medinsky as head of Russia’s delegation. The goal of participation was to be formally present in the process while ignoring the substantive part of the negotiations, and at the same time to seek financial concessions from the United States — not in exchange for ending the military campaign, but effectively to make its continuation less costly.

Delegation head Medinsky limited himself to the formula that the talks were “difficult, but businesslike” (14). Dmitry Peskov said the results were reported to Vladimir Putin (15). The New York Times emphasized that the talks showed minimal progress and confirmed that ending the war remains out of reach (16).

In parallel, national propaganda resources continue to insist on the need to achieve broadly and vaguely defined, effectively indeterminate “objectives of the special military operation.” On February 19, Deputy Chair of Russia’s Security Council Dmitry Medvedev (17).

Military problems: a contrast with official messaging

If the Kremlin is already forced to acknowledge economic problems publicly, emphasizing work in this direction because it is becoming increasingly difficult to conceal the economic crisis, it cannot acknowledge problems at the front — because that would undermine the core premises of propaganda and could intensify tension and dissatisfaction in society. As a result, the Kremlin concentrates its key propaganda resources on creating an image of military success and constant battlefield momentum. “The Year of Victory. The Russian army is preparing to deliver a deadly blow to Ukraine’s Armed Forces,” the national propaganda outlet Arguments and Facts (18) headlined a February 20 article. Against this backdrop, the channels of major pro-war Z-authors look especially stark, as they systematically emphasize structural military problems. The Z-channel “Philologist in an Ambush” (19) wrote: “The Starlink shutdown has had a very negative impact…”. Z-author Maksim Kalashnikov said of the military-political leadership: “They don’t care about communications problems… Everything is always fine for them!” (20). Z-channels have also repeatedly pointed to official Defense Ministry reports claiming settlements that have not yet been captured, and to contempt for Russian soldiers’ lives for the sake of reporting “advances” (21), (22). DeepState reported that the Russian army’s pace of advance fell to 36 square kilometers for the week of February 9–15 — the lowest figure in the past 10 months (23). On January 20, Bloomberg reported that Russian military losses have become comparable to the pace of recruitment (24), (25). Against this backdrop, since the start of 2026 at least 14 Russian regions have increased financial bonuses for signing a contract with the Defense Ministry (26). The Kremlin is also placing additional emphasis on contradictions among Ukraine’s allies, on fractures within Europe, and on internal Ukrainian divisions. On February 19, pro-Kremlin experts in national propaganda outlets actively interpreted an Associated Press interview with Valerii Zaluzhnyi as a possible sign of disagreement and amplified that narrative in an information campaign. Taken together, this indicates that Moscow is using diplomatic formats as a tool of tactical maneuvering, without abandoning maximalist military and political goals, and betting that Ukraine and its allies will prove less resilient than the Kremlin.