In the wake of the 2022 invasion of Ukraine, numerous international corporations vacated Russia, with American giants such as Coca-Cola, Nike, Starbucks, ExxonMobil, and Ford Motor Co. among them. Fast forward more than three years into the conflict, speculation has surfaced about the potential for reviving U.S.-Russia trade should a peace agreement materialize. Former President Donald Trump suggested the possibility of reestablishing trade relations in conjunction with Russian President Vladimir Putin expressing openness to foreign companies returning under particular scenarios.
Trump articulated, following a conversation with Putin, that Russia’s willingness to engage in extensive trade with the U.S. post-conflict could generate significant employment and wealth, highlighting Russia’s untapped potential. Nevertheless, Trump’s subsequent criticism of Putin for intensified attacks on Kyiv and threats of additional sanctions underpins the notion that re-entry into the Russian market poses considerable challenges for foreign businesses due to evolving dynamics.
Russia’s business landscape has experienced a significant transformation since 2022, largely in unfavorable ways for external enterprises. As Putin’s military operations intensify and territorial claims over disputed areas remain non-negotiable with Ukraine, achieving a peace settlement appears increasingly unlikely.
One major deterrent for U.S. firms considering a return to Russia is the substantial risk of asset loss. Russian legislation labels Ukraine’s allies as “unfriendly states,” thereby imposing stringent limitations on businesses from over 50 nations, such as restrictions on money and equipment withdrawal and the potential for government appropriation of strategic companies. As a consequence, firms were often required to sell their Russian operations at a reduced value or abandon them, with Kremlin-aligned organizations benefiting from these assets at bargain prices.
For example, a 2023 decree enabled Russian control over several international companies including Finland’s energy company Fortum, Germany’s Unipro, France’s Danone, and Denmark’s Carlsberg. Even if a peace agreement leads to the U.S.’s removal from the unfriendly status and the cessation of widespread Western sanctions, the historical record of financial losses would linger, discouraging prospective returns.
Analysts such as Chris Weafer, CEO of Macro-Advisory Ltd., note a lack of tangible evidence supporting business intentions to return despite political rhetoric suggesting otherwise. Elina Ribakova from the Bruegel research institute in Brussels echoed these sentiments, casting doubt on the probability of U.S. businesses resuming operations in Russia.
In a Kremlin meeting, Putin underscored the need to suppress major tech conglomerates like Zoom and Microsoft, which adjusted their services post-invasion, to foster the growth of domestic tech firms. He reassured Russian businesses that the government would support them against potential re-entry attempts by Western firms such as McDonald’s, which had previously declared the infeasibility of maintaining its Russian operations.
Economists foresee stagnant economic forecasts for Russia due to the absence of investments beyond military sectors. Heli Simola, a senior economist at the Bank of Finland, described Russia’s long-term growth outlook as bleak, matched only by countries like Belarus. The lack of lucrative sectors beyond military production diminishes incentives for U.S. companies to reinvest.
Some companies, like Renault and Ford Motor Co., negotiated repurchase agreements allowing future stake reacquisition should conditions improve. However, the unpredictability of Russia’s legal landscape casts doubt on such prospects. Purchasers may seek to alter terms, demand more compensation, or ignore agreements altogether, leaving significant uncertainty concerning buyback enforcement.
While multinational oil corporations endured immense losses in Russia, their future involvement remains uncertain. ExxonMobil’s termination from the Sakhalin oil project resulted in a $3.4 billion write-off. Although Russia’s oil firms are less reliant on foreign counterparts nowadays, smaller oil services could pursue opportunities within the expansive industry. However, they would contend with new local investment and operational requirements.
Despite the departure of numerous businesses, some 2,329 foreign companies continue operations, primarily from China or nations not aligned with Ukraine. Around 1,344 are in the process of leaving, while 494 have fully exited, according to the Kyiv School of Economics. Meanwhile, the Yale School of Management identifies about two dozen U.S. firms still engaged in Russian markets, with approximately 100 others having scaled back their operations by ceasing new investments.
Consequently, even if U.S. sanctions are lifted, lingering European Union sanctions could maintain compliance challenges for any company seeking to do business in both Russia and Europe.