Russia's recent actions indicate significant risks for Western businesses considering re-entry following Donald Trump's presidency, which has reversed some diplomatic isolation toward Russia.
Since the invasion of Ukraine by Russia on February 24, 2022, relations between Western nations and Russia have been tense, shaped heavily by economic sanctions and state seizures of foreign assets. Trump’s presidency, beginning January 20, 2025, has stirred conversations about potentially resetting relations with Russia, raising questions about the security for foreign businesses eyeing investment or re-entry.
For many, this was highlighted when the Russian government seized control of Glavprodukt, Russia's largest canned food producer, owned by a U.S. company. The takeover was executed under the guise of 'temporary management,' which has recently become standard procedure for the Russian government during this time. According to founder Leonid Smirnov, “They have completely taken away my control of my company,” reflecting the uncertainty faced by Western owners and investors.
The effect of the asset seizures goes beyond asset value and could deter future investments. Since October 2024, following the transition of ownership control, Glavprodukt's sales have dropped by around 10%, with business operations disrupted. Smirnov added, “A few weeks later, we were looking at Russia's corporate registry online and saw the owner changed from us to a division of the Russian Federation. This 'temporary change' does not look so temporary.”
This has not been the only case. Major brands such as Carlsberg also experienced government intervention after announcing divestiture from their Russian operations. The brewery had agreed to sell its stake to undisclosed buyers, only to see its assets placed under government control before the transaction could finalize. Carlsberg’s CEO, Jacob Aarup-Andersen, shared, “From day one, we lost operational control.”
Such actions have heightened concerns among investors. The Russian government, according to analysts, has effectively reshuffled the balance of ownership to favor regime loyalists, raising questions about the likelihood of restoring former ownership to exiled corporate leaders or satisfying their claims post-seizure.
During Trump’s presidency, some Western firms might be optimistic about the easing of sanctions. Trump has indicated support for restoring ties with Russia, presumably easing economic restrictions. Yet, speculations about whether U.S. companies will return remain speculative, with no firms yet announcing plans to re-engage fully. Even as Trump maintains this pro-Russia stance, the lack of legal and operational recourse for businesses facing asset seizures complicates the matter.
Serious discussions are currently underway involving Trump and Ukrainian President Volodymyr Zelenskyy, amid fears of escalation if the conflict drags on. Zelenskyy visited the White House to finalize significant economic agreements targeting Ukraine's reconstruction, reinforcing ties amid complicated diplomatic relations. Trump’s readiness to negotiate is viewed cautiously, as he labeled Zelenskyy a 'dictator' and contributed to heightened diplomatic tensions as he blames Ukraine for starting the conflict. This has intensified the dilemma for businesses torn between the potential thawing of diplomatic ice and the harsh reality of Russian state economic maneuvers.
The actions by Putin’s administration also rebuff any idea of instant readjustments to the economic sanctions. The federal property management agency, Rosimushchestvo, has taken aggressive steps toward controlling foreign-held assets as government officials have installed their management teams to oversee companies considered to have undermined national interests.
Recent developments also hint at escalations. Russia passed legislation enabling it to claim property belonging to U.S. companies as compensation for assets frozen overseas. This marks another evolution in the Russian government’s approach to handling business interests, severely complicate re-engagement efforts for interested foreign investors.
Observers note how Trump's administration’s attempts to wholly reset relations with Russia may soon begin to conflict with the economic realities businesses face when considering or planning to engage with the Russian market under the current political climate. Even amid optimism within certain factions about easing tensions, it remains unclear how restoring trust and operations to foreign ownership would be feasible after the upheaval experienced since the invasion of Ukraine.
With both sides preparing for pivotal negotiations, the question looms large—what does the future hold for Western businesses under Trump’s presidency? For many, the answer may still hinge on Turkey and Chinese allegiance as they actively engage with Russia beyond the purview of Western countries.
For the foreseeable future, developments around business operations within Russia will be closely monitored, especially considering Trump's full standing as national sentiment evolves and is characterized by insecurity, political posturing, and uncertainty stemming from wartime policies.