US sanctions are full-scale 'economic war', says Russia

Russian Prime Minister Dmitry Medvedev says the US has declared a "full-fledged economic war" by imposing sanctions.

Using Donald Trump's favorite social media site, the Russian politician tweeted that the "US establishment [had] fully outwitted Trump", linking his post to a lengthy Facebook rant denouncing Washington's move.

"The Trump administration has shown its total weakness by handing over executive power to Congress in the most humiliating way. This changes the power balance in US political circles," he wrote.

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Russian broadcaster RT called it a "slamming" of the Trump administration for its "humiliating cave-in".

Trump tweeted his reply - passing the blame to the US Congress.

"Our relationship with Russia is at an all-time & very dangerous low. You can thank Congress, the same people that can't even give us HCare!" Trump tweeted.

The sanctions restrict how much money Americans can invest in Russian energy projects and make "it more difficult for US companies to do business with Russia", the BBC reports. Similar moves were also placed on North Korea and Iran, who accused the US of violating their nuclear deal and vowed to take a "proportional reaction", Reuters reports.

Europe has also warned the sanctions could hurt its energy market, The Atlantic reports. Many of the EU's member states are reliant on Russian supplies.

The US has committed to only applying the sanctions after it consults its allies - "and I do believe we are still allies of the US," Jean-Claude Juncker, President of the European Commission.

He also told the Atlantic:"'America First' cannot mean that Europe's interests come last."

Russia expels 755 US diplomats in response to sanctions

31 July

Vladimir Putin has ordered the expulsion of 755 US diplomatic staff and hinted Moscow could take further action following Washinton's vote for fresh sanctions over Russia's annexation of Crimea in 2014 and alleged interference in last year's US presidential election.

Speaking on TV this weekend, the Russian President said he had run out of patience waiting for relations with the US to improve, despite seemingly friendly interactions with Donald Trump during the G20 summit in Hamburg.

"We've been waiting for quite a long time that maybe something would change for the better. We had hopes that the situation would change, but it looks like it's not going to change in the near future. I decided that it is time for us to show that we will not leave anything unanswered," he said.

"Over 1,000 employees - diplomats and technical workers - worked and continue to work today in Russia; 755 will have to stop this activity."

The expulsion brings the US diplomatic presence in Moscow down to 455 people, "matching the number of Russian diplomats left in the US after Washington expelled 35 Russians in December", The Australian reports. In addition, Russia said it would seize holiday homes and a warehouse used by the diplomats.

Putin also warned of "further measures" against US interests, a threat repeated by Sergei Ryabkov, the deputy foreign minister.

"We have a very rich toolbox at our disposal," Ryabkov told ABC News. "I can assure you that different options are on the table and consideration is being given to all sorts of thing."

A senior US State Department official, speaking anonymously to the Washington Post, described the expulsion as "regrettable and uncalled for".

Republican deal reached on US-Russia sanctions

27 July

Republican politicians have reached a deal paving the way for the US to impose harsh new sanctions against Russia, North Korea and Iran while limiting President Donald Trump's ability to remove them.

Senator Bob Corker, who will introduce the new legislation along with Congressman Kevin McCarthy, said: "Following very productive discussions with Leader McCarthy, I am glad to announce that we have reached an agreement that will allow us to send sanctions legislation to the president's desk."

The sticking point between the two Republican heavyweights was reportedly the inclusion of an existing sanctions bill against North Korea, which had been passed by the House of Representatives before "languishing in the Senate for over two months", CNN reports.

"If the bill passes the Senate as expected, it would be sent to the White House for Trump to sign into law or veto," Reuters says. "It is, however, expected to garner enough support to override a Trump veto."

Kremlin spokesman Dmitry Peskov called the vote - an overwhelming 419 to three - "rather sad news" that threatened to sour relations between Trump and Russian President Vladimir Putin.

"We are talking about an extremely unfriendly act," he added.

"Moscow had initially hoped Trump would work to repair a relationship that has slumped to a post-cold war low," The Guardian says, "but has watched with frustration as allegations that it interfered with last year's US presidential election and concerns over Trump associates' Russia ties have killed off hopes of detente."

US to vote on Russia sanctions

25 July

US politicians are expected to vote on new sanctions on Russia tonight for alleged interference in last year's presidential elections, but it could be Europe that feels the pain.

The proposed bill, which will also hit North Korea and Iran, empowers Donald Trump to sanction companies offering technology, services, investment or support to Russian export pipeline projects.

However, the European Commission has told the EU to act if the move goes ahead.

It is concerned with the breadth of the proposed sanctions, which Bloomberg says "clumsily" step on Europe's economic interests. Proposed measures include fines for foreign companies that aid Moscow in building energy export pipelines such as the the Nord Stream 2, a €9.5bn (£85bn) project to carry Russian gas across the Baltic and into north Europe.

"A raft of top European companies will be forced to pull out of the Nord Stream 2 gas pipeline project with Russia or face crippling sanctions under draconian legislation racing through the US Congress," the Daily Telegraph reports.

European companies involved in the pipeline include Engie of France, the UK-Dutch Royal Dutch Shell, OMV Group of Austria and Germany's Uniper and Wintershall, Bloomberg reports.

According to CNBC, the European Commission will lobby the US to exclude EU energy companies from the sanctions. However, options are limited if that cannot be achieved.

Europe's former Soviet states, wary of Nord Stream and what it sees as an increasing EU dependence on Russian gas, are unlikely to support punitive action against the US, while the UK may put a future trade deal with Washington before retaliatory action, adds the site.