At the very end of his press conference in Florida, shortly after the successful US exfiltration of Venezuelan President Nicolás Maduro on 3 January, US President Donald Trump began talking about the wars he had stopped and was asked about Russia and Ukraine. Before his second term of office, he boasted of being able to end the war in Ukraine in 24 hours. “I thought the easiest... one of the easier ones would be Russia, Ukraine,” he said, answering reporters’ questions. “It’s not.”
Although Trump’s promise of a speedy resolution has long been forgotten, several aspects of his approach became clear in 2025. Among the more notable was that his administration is willing take a different approach to America’s NATO allies and think about wars in a purely transactional manner.
Russian President Vladimir Putin was shunned by Europe and others who support Ukraine, but the White House engaged him directly, and Trump even hosted him on American soil in August. In November, a leaked peace proposal read like a Kremlin wish-list, triggering alarm in Europe, forcing the US administration to deny that it had been written by the Russians, and prompting a counter proposal. This was less to Putin’s liking, with Ukrainian cities then being pounded by Russian bombs.
Looking for good news
After all its losses in both equipment and personnel, the Kremlin feels it needs to declare a victory in Ukraine, and the permanent addition of Ukrainian territory (particularly the Donbas and much of Ukraine’s south) would be the best way to do it. Still, despite its numerical advantages, there is a sense that Russia cannot keep fighting the war for much longer. Clues for this come from the economy’s performance in 2025.
For the past three years, the Russian economy has grown at a faster pace than some in Europe, so the outward signs are good. But look a little closer, and there are signals that the economy is slowing. In July, the Central Bank of Russia predicted gross domestic product (GDP) growth of 1-2% for 2025, down from 4.3% in 2024, but this forecast was later lowered to 0.5-1%.
In 2025, the Europeans tightened sanctions on Russia, and the White House imposed secondary sanctions on countries buying Russian oil, affecting the likes of India. In parallel, the Russian economy became increasingly dependent on China in 2025, with the two nations now largely using the Chinese currency in their transactions, which may concern Trump, who advocates the primacy of the US dollar in international trade.
Counting the cost
In addition, the cost of war remains historically high, with more than 8% of Russia’s GDP reportedly being spent on its military. Interest rates are high, at around 16%. Several big companies—including those with defence contracts—get Kremlin-subsidised rates, which pushes up costs for the rest of the economy. Inflation is down, however, to around 6%, having hovered around 9% in 2024.
