Just the two of us

U.S. and Russia hold bilateral talks in Saudi Arabia

Sara Ashbaugh

Andras Toth-Czifra

, and

Lisa Noskova

Feb 22, 2025

Hello from the Bear Market Brief.

This week in the news:

American and Russian delegations met for bilateral talks in Saudi Arabia, laying the groundwork for negotiations to end the war.
President Trump attacked President Zelenskyy on social media, calling him a dictator and questioning his approval rating.
Zelenskyy pushed back during a press conference in Kyiv, accusing Trump of echoing Russian propaganda.
The EU, reeling from the sudden shift in American foreign policy, adopted a new sanctions package against Russia.

— Sara Ashbaugh, Editor in Chief

U.S.-Russia talks in Saudi Arabia

American and Russian officials gathered in Saudi Arabia on Tuesday for the first high-level meeting between the two countries since Russia’s full-scale invasion of Ukraine. The talks came less than a week after President Trump’s momentous phone call with Vladimir Putin, during which the pair agreed to negotiate an end to the war. This new approach marks a drastic shift in American foreign policy towards Russia, which previously emphasized Russian diplomatic isolation and support for Ukraine. Now, the Trump Administration seems poised to push for a swift end to the conflict. The phone call also shocked the U.S.’s European allies, who condemned Trump’s apparent willingness to make concessions to Russia. Following the call, both Trump and U.S. Secretary of Defense Pete Hegseth said that it was “unrealistic” for Ukraine to expect to return to its pre-2014 borders or to obtain NATO membership, two of Russia’s major demands.

U.S. and Russian officials met in Riyadh, Saudi Arabia’s capital city. The two foreign ministers, Sergei Lavrov and Marco Rubio, led the delegations, but there was a sharp contrast between the two groups. Russia’s negotiators included Yury Ushakov, chief foreign policy advisor of the Kremlin, Kirill Dmitriev, the U.S.-educated head of Russia’s Direct Investment Fund, and Sergey Naryshkin, the head of Russia’s Foreign Intelligence Service (SVR). The U.S. team, on the other hand, included figures such as National Security Adviser Mike Waltz, who has no specialist expertise on Russia, and real estate entrepreneur Steve Witkoff, Trump’s golf partner. Witkoff recently traveled to Russia to negotiate the release of American teacher Marc Fogel in exchange for convicted cybercriminal Alexander Vinnik.

In an interview with the Associated Press following the meeting, Rubio said that the two sides established three main goals: to restore staff at their respective embassies, to create a team for future peace talks, and to improve economic cooperation. It is remarkable that the U.S. delegation highlighted (unspecified) economic cooperation opportunities between Russia and the U.S.—including energy ventures—even before any progress could be made on the issue of Ukraine. At the meeting, Russia also reiterated that any future deal would be unacceptable if it included peacekeepers from NATO deployed to Ukraine.

While pro-Kremlin propagandists were jubilant about the outcome of the Riyadh talks, Russia’s government has taken a more cautious approach. Kremlin spokesperson Dmitry Peskov said that Putin would likely not meet with Trump before the end of February. The Kremlin reportedly did suggest that it would “concede” $300 billion in frozen assets as part of a settlement with Ukraine, but only if these funds would be used for reconstruction in Russian-occupied areas. To understand the scale of the fiscal relief that this would bring to the Russian federal budget, it is worth noting that over the past two years the budget allocated less than $10 billion in the form of budgetary transfers to the occupied territories (albeit this does not include other subsidies coming via other funds, state-owned companies, Russian regional budgets, etc.).

President Putin’s address to the Federal Assembly (a joint meeting of the two chambers of Russia’s parliament) was postponed from February to an unspecified future date. This highlights the importance of the outcome of the talks, but also reflects that the Kremlin has likely not yet decided how much benefit it can extract from them towards its war objectives. Indicating that Russia has the upper hand in the war has been one of the cornerstones of the Kremlin's efforts to maintain domestic stability. Importantly, this exercise does not require the Kremlin to actually work towards an agreement with the U.S. or Ukraine, but simply to demonstrate that the Western alliance behind Ukraine is cracking.

— Andras Toth-Czifra & Sara Ashbaugh

American and Russian officials posed for a photo ahead of the peace talks in Riyadh this week. The American delegation included, from left to right, Middle East envoy Steve Witkoff, Secretary of State Marco Rubio, and National Security Advisor Mike Waltz, seated across from Russian foreign policy aide Yury Ushakov and Foreign Minister Sergei Lavrov. The CEO of the Russian Direct Investment Fund, Kirill Dmitriev, and the head of Russia’s Foreign Intelligence Service, Sergey Naryshkin, were also present. The group met in one of the palaces of the Saudi Arabian royal family, and two Saudi hosts chaired the meeting: Foreign Minister Prince Faisal bin Farhan and National Security Adviser Musaed al-Aiban. (photo: Evelyn Hockstein / POOL / AFP)

Trump’s attacks on Zelenskyy

Relations between President Trump and President Zelenskyy have rapidly deteriorated over the past week, with Trump publicly questioning Zelenskyy’s approval rating and legitimacy as a leader.

Ukrainian officials were not invited to the U.S.-Russia talks in Riyadh, despite Trump saying last week that Ukraine would be included in any peace negotiations. Now, he has struck a different tone, claiming that Ukraine already had its chance to make a deal with Russia. “I hear that they're upset about not having a seat, well, they've had a seat for three years and a long time before that,” Trump said during an interview at his Mar-a-Lago residence on Tuesday. He went on to say that Ukraine “should have never started” the war, despite the fact that Russia started the war by invading Ukraine.

On Wednesday, Trump released several posts on his social media platform attacking Zelenskyy, in particular his democratic legitimacy and background as a “modestly successful comedian.” In a post on Truth Social, Trump called Zelenskyy “a dictator without elections” and claimed that he was “very low in Ukrainian polls.” While Trump’s preoccupation with television ratings—given his background as a former reality show personality—is well-known, his remarks also suggest that the U.S. President regards his Ukrainian counterpart as an obstacle to his desired deal. By launching a conscious, targeted attempt to question Zelenskyy’s legitimacy and force a presidential election in Ukraine, Trump reiterated a long-time Russian demand. The President’s remarks did not only echo Russian propaganda talking points, but also seemed to signal an abrupt shift in U.S. policy on Ukraine. This new attitude contradicts even U.S. Vice President JD Vance’s own statements about a forceful U.S. policy vis-à-vis Russia, which he made less than a week prior.

Zelenskyy fired back at Trump, questioning the accuracy of his statements. “We have seen this disinformation. We understand that it is coming from Russia,” he said. “With all due respect to President Donald Trump as a leader...he is living in this disinformation space,” he continued.

— Andras Toth-Czifra & Sara Ashbaugh

Zelenskyy’s reaction to U.S.-Russia talks

After the U.S.-Russia talks in Saudi Arabia, President Zelenskyy addressed the press in Kyiv. He remarked that the negotiations between the United States and Russia have helped end Putin’s years of isolation. “I wish Trump’s team had more access to the truth, because this certainly doesn’t benefit Ukraine. What it does is bring Putin out of isolation. Putin and the Russians are pleased that issues are being discussed with them. Yesterday, we even saw signs of them being treated as victims. This is something new,” Zelenskyy said.

The Ukrainian President also addressed President Trump’s false claim that Zelenskyy has a 4% approval rating by referencing a recent survey showing his approval at 57%. In contrast, Trump’s approval rating stands at 45%, according to Gallup.

Trump’s recent comments, labeling Zelenskyy as “a dictator without elections,” echo Russian propaganda attempting to delegitimize the Ukrainian President. This narrative relies on the premise that Zelenskyy’s first presidential term was supposed to end on May 20, 2024. However, this claim ignores Ukraine’s constitution, which prohibits elections during martial law. Martial law has been in effect since Russia’s full-scale invasion, which began in February 2022.

Shortly after calling Zelenskyy a dictator, Trump announced that he would attempt to revive the rare earth mineral deal with Ukraine, despite Zelenskyy’s refusal to sign it last week due to the absence of security guarantees for Ukraine. “I think I’m going to resurrect that deal. We’ll see what happens, but I’m going to bring it back, or things aren’t going to make [Zelenskyy] too happy. And look, it’s time for elections,” Trump said. Reports suggest that the U.S. is seeking to control 50% of Ukraine’s critical minerals, including graphite, uranium, titanium, and lithium. Trump has previously stated that he expects $500 billion worth of rare earth minerals from Kyiv in exchange for continued aid from Washington. On February 20, U.S. envoy Keith Kellogg and Zelenskyy discussed a modified draft of the agreement, which Axios’s sources said the Ukrainian President may sign. However, the two cancelled a planned press conference following the meeting, suggesting continued tension in the relationship.

— Lisa Noskova

This week marked the one-year anniversary of the death of Alexei Navalny, prominent Russian opposition leader and political prisoner. Navalny died in the Arctic IK-3 penal colony on February 16, 2024 under suspicious circumstances, with a journalistic investigation suggesting that he was poisoned. On Sunday, mourners gathered at his grave in Moscow's Borisovskoye Cemetery to pay their respects, risking retaliation by Russia’s increasingly repressive regime. Protesters commemorating Navalny in several Russian regions were harassed and manhandled by the authorities. (photo: Alexander Nemenov / AFP)

New EU Sanctions

Recent U.S. actions, including the hectoring speech of Vice President JD Vance at the Munich Security Conference last week and the sidelining of the EU from the U.S.-Russia talks, have sent shockwaves through the U.S.’s European allies. European leaders have had to scramble to rethink their approach, not only to the war in Ukraine, but also to a U.S. government that is actively trying to undermine the EU.

Shortly after Vance’s speech in Munich, a crisis management process was initiated by French President Emmanuel Macron, who invited European leaders (including UK Prime Minister Keir Starmer) to Paris for a summit on February 17. The French President acted as a natural leader of the pushback against (what the EU perceived as) the U.S. threatening to abandon its defense commitments to its European allies. This is in part due to German Chancellor Olaf Scholz facing a likely electoral defeat on Sunday and the fact that UK is no longer part of the EU. Both Macron and Starmer will visit Washington in the coming weeks, but, based on the opinions voiced during the summit, it is unclear what message they will bring to the U.S. government. Starmer stressed that he was ready to send British troops to Ukraine as part of a ceasefire agreement, while Macron, Scholz, and even Polish Prime Minister Donald Tusk were more cautious (albeit France and Britain later drew up plans to create a “reassurance force” relying on air power). Scholz deemed suggestions to circumvent NATO as “inappropriate.” His likely successor, Friedrich Merz, supports sending Taurus missiles to Ukraine, which Scholz did not. Italian Prime Minister Giorgia Meloni, who has otherwise been a supporter of Ukraine, only attended part of the summit.

On February 20, Macron stated, somewhat unexpectedly, that the “uncertainty” prompted by Trump’s attacks on Zelenskyy could turn out positively for Ukraine and Europe. He argued that it would allow the U.S.’s allies to berate Trump about his weakness and remind him that China is paying attention, thus encouraging the erratic Trump to use the full force of economic sanctions to bend Putin’s will. However, Macron did warn the French public that the world was entering a dangerous new era in which defense investments should be prioritized, and members of his government had previously criticized Trump’s misleading comments on Ukraine.

Additionally, the EU preliminarily adopted a new sanctions package—its sixteenth—against Russia. The final approval for the package will be pronounced by EU foreign ministers on Monday, February 24, on the third anniversary of Russia’s full-scale invasion of Ukraine. Hungary’s government has threatened to block the sanctions, however, “to give time” for U.S.-led peace talks. The package includes export bans on chemicals, products used in machine tools, a ban on EU companies servicing Russian oil and gas refineries, and a ban on the import of Russian aluminum. The sanctions also affect vessels in Russia’s shadow fleet, which helps Russia export oil and circumvent sanctions. EU countries are also reportedly holding talks to create new powers for the EU to seize vessels belonging to this fleet. Shadow fleet tankers were previously sanctioned as part of the Biden Administration’s “goodbye package.”

— Andras Toth-Czifra

Upcoming Virtual Event | Three Years of Russia’s War in Ukraine: What’s Ahead in 2025?

Monday, February 24 at 10:30 AM EST

February 24 marks three years since Russia’s full-scale invasion of Ukraine began. The war still rages on, with nearly 33,000 civilian casualties and Russia occupying more than 7% of Ukraine’s territory. What does 2025 hold for Ukraine? Is a ceasefire possible? What roles have the U.S. and EU played in supporting Ukraine, and what must they do differently going forward to ensure a just peace for Ukraine?

Quickfire: Regions

The Russian government will pay 65,000 rubles monthly to each displaced person in the Kursk Region who lost their home. Payments will continue until the Russian army reestablishes control over the whole region. The move, for which 40 billion rubles was allocated from the federal budget (for context, this is equal to about half the region’s annual budget), is meant to mitigate tensions that culminated in a series of protests over the past weeks. Demonstrators protested the local government’s failure to execute payments to residents and companies participating in relief efforts. The region’s governor, Alexander Khinshtein, is also pushing for a restructuring of loans for affected Kursk residents. At the same time, however, Khinshtein asked the Prosecution to open a probe into Sudzha Rodnaya, a Telegram channel that was one of the main outlets highlighting the problems that refugees have faced in the region.

The past week saw steps to introduce significant electoral modifications in several regions, as well as on the federal level. In Yakutsk, in spite of opposition from the New People Party (one of whose leaders, Sardana Avksentieva, is a former mayor of the city), the city council overwhelmingly voted to abolish direct mayoral elections. After the regional legislature confirms the decision, mayors will be elected by the city council from candidates pre-selected by a “competition committee.” This will likely increase the influence of the regional government over politics in the city. In the Komi Republic, the regional parliament changed the electoral system to purely majoritarian instead of the previously-used mixed system with both single-mandate majoritarian districts and party lists. This change will likely increase the weight of the dominant party (United Russia) in the regional legislature, whose politics have been relatively pluralistic and conflictual in recent years. Meanwhile, the State Duma started discussing amendments to federal electoral legislation. These would allow the authorities to completely replace paper ballots with electronic voting—which has historically been easier to manipulate. It would also exclude Russians residing abroad from voting in single-mandate districts (thus they would only be able to vote for party lists), thereby depriving them of a way to express protest voting. The changes would also abandon the practice of holding by-elections in districts whose positions become vacant in an election year or the year preceding it.