President Donald Trump once again stands accused of being soft on Russia after he bypassed a deadline to hand down new sanctions on the country.
The Trump administration announced late Monday that it would not yet impose new sanctions on Russia as mandated by the Countering America's Adversaries Through Sanctions Act (CAATSA), enacted in August to punish Moscow for its alleged interference in the 2016 U.S. election and military interference in Ukraine.
The move, or lack thereof, is widely being chalked up as a win for Russia.
"The champagne corks will be popping again in Moscow this morning with another major win for (Vladimir) Putin over the DC establishment," said Timothy Ash, senior sovereign strategist for emerging markets at Bluebay Asset Management. "No new sanctions — Russian markets are likely to be cheered by this as expectations in Moscow at least (were) for much worse outcomes."
Defending the decision, State Department spokeswoman Heather Nauert claimed that CAATSA itself, passed last year with bipartisan support, is sufficient legislation against the Russians and therefore no more action is needed.
"Sanctions on specific entities or individuals will not need to be imposed because the legislation is, in fact, serving as a deterrent," she said in a statement.
As required by the legislation, the Trump administration on Monday released a Treasury Department-compiled list of Russian political and business figures that it stated is "not a sanctions list", refusing to add their names to the existing blacklist. Some of the figures and entities named were already subject to U.S. sanctions imposed under the Obama administration.
"Moscow had anticipated a much more aggressive approach from Washington, with Kremlin officials pre-emptively describing the new list as an attempt to interfere with the March presidential election," Daragh McDowell, principal Russia analyst at Verisk Maplecroft, told CNBC in an email.
"Depending on the reaction of the U.S. Congress to the White House's actions, it seems highly unlikely that new economic and political sanctions will be applied on Russia by the U.S. during President Trump's tenure," McDowell said.