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Russia denounces new US sanctions, weighing retaliation

Tensions are on the rise between the US and Russia, with Russia calling the newest round of sanctions from the US as 'illegal' and threatening to lash out in response.

Key quotes

"Moscow has been trying with mixed success to improve battered U.S.-Russia ties since Donald Trump won the White House in 2016, and Russia’s political elite was quick to chalk up a summit last month between Trump and Vladimir Putin as a victory. But initial triumphalism swiftly turned sour as anger over what some U.S. lawmakers saw as an over deferential performance by Trump and his failure to confront Putin over Moscow’s alleged meddling in U.S. politics galvanized a new sanctions push.

In the latest broadside, the U.S. State Department said on Wednesday it would impose fresh sanctions by the month’s end after determining that Moscow had used a nerve agent against a former Russian double agent, Sergei Skripal, and his daughter, Yulia, in Britain, something Moscow denies.

The Kremlin said the sanctions were illegal and unfriendly and that the U.S. move was at odds with the “constructive atmosphere” of Trump and Putin’s encounter in Helsinki. Moscow would start to work on retaliatory measures “in the same spirit” as any U.S. restrictions, the Foreign Ministry said.

The new sanctions come in two tranches. The first, which targets U.S. exports of sensitive national-security related goods, comes with deep exemptions and many of the items it covers have already been banned by previous restrictions. The second tranche, which can be selectively activated after 90 days if Moscow fails to provide “reliable assurances” it will no longer use chemical weapons and blocks on-site inspections, is potentially more serious.

According to the law, it could include downgrading diplomatic relations, suspending national flag carrier Aeroflot’s ability to fly to the United States and cutting off nearly all exports and imports."

Author

Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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