Moscow loathed the U.S. for years as its economy paid a high price for war — now, it’s doing a U-turn

Since invading Ukraine three years ago, Russia has spent a significant amount of energy demonizing the U.S. and denigrating its leadership, economy and culture — and what it saw as Washington’s “hegemony” in the global world order.

U.S.-led international sanctions prompted more vitriol from Moscow, with Russian President Vladimir Putin and other senior officials slamming the almost continuous slew of punitive restrictions on key sectors of the Russian economy and its elite, as the war continued.

But the arrival of a friendlier administration under President Donald Trump and fledgling talks with the U.S. to end the conflict in Ukraine — as well as a way back in from the economic and geopolitical cold — are prompting a U-turn in Moscow, with the Kremlin dramatically softening the adversarial position it has occupied in recent years.

As tensions between Trump and Ukraine’s President Volodymyr Zelenskyy spilled over into open acrimony on Wednesday, with Trump calling Zelenskyy a “dictator,” Putin broke his silence on the rapprochement between Russia and the U.S. in Saudi Arabia this week after the first sit-down talks between officials since early 2022.

“”I rate [the negotiations] highly, there is a result,” Putin said, adding that the meeting was “very friendly.”

“In general, as I was told, it [the mood] was very friendly. On the American side, there were entirely different people who were open to the negotiation process without any bias, without any prejudice to what was done in the past,” he said in comments translated by NBC News.

Putin also praised Trump for showing “restraint” amid what he described as “hysteria” by European leaders who are angry at being left out of negotiations on Ukraine’s future.

The mood music in Moscow appeared to change swiftly after the Russia-U.S. talks in Riyadh on Tuesday which aimed — ostensibly — to lay the groundwork for upcoming peace talks on Ukraine, despite Kyiv’s absence from the discussions.

Russian state media responded positively to the talks and changing tide in Russia-U.S. relations, as did senior officials in Moscow who are part of Putin’s loyal inner circle.

Kremlin Spokesperson Dmitry Peskov said Wednesday that the talks had focused on a “revival” of U.S.-Russia relations more than Ukraine, saying the mood was now “business-like.”

Foreign Minister Sergey Lavrov echoed that sentiment, commenting on the “very constructive” talks that had taken place, and stating Wednesday that the countries had “begun to move away from the edge of the abyss where Biden’s administration led our relationship.”

“For now, it is necessary to clean up the legacy of the Biden administration, which did everything to destroy … the very foundation of long-term partnership between our countries,” Lavrov said, commenting on the possibility of strategic cooperation between Russia and United States, Russian state news agency Tass reported.

CNBC has requested further comment from the Kremlin on the change in position vis-a-vis Washington and is awaiting a response.

There’s no doubt that Joe Biden’s departure from the White House and Trump’s return have prompted Moscow to soften its rhetoric toward the United States, with whom it had warm relations during the president’s first term in office from 2017 to 2021.

Russian President Vladimir Putin even signaled his support for tariffs that Trump announced in his first weeks in office, stating that the U.S.’ European allies would “stand at the feet of the master” when confronted with Trump’s trade threats.

Russia also stands to benefit significantly from the end to a war that has put its economy on a war footing, with Moscow having massively ramped up its production of military hardware, diverting workers away from other key industries and production, contributing to persistent inflationary pressures and a rise in the price of basic goods and foods that have been felt keenly by Russian citizens.

Moscow has frequently downplayed the impact of Western sanctions on its major industries, particularly its oil and gas sectors, and any hit to its export revenues, instead championing its ability to mitigate sanctions by bolstering trade with other countries, such as China and India.

Nonetheless, an alleviation of restrictions and a reopening of access to former markets in the West as part of a peace deal would undoubtedly be a boon to Moscow, economists say.

“The decision by the U.S. and Russia to ‘lay the groundwork’ to end the war in Ukraine marks a potentially significant turning point after three years of conflict,” Liam Peach, senior emerging markets economist at Capital Economics, said in a note Tuesday.

“Negotiations will take time and the macroeconomic implications will depend on the features of any agreement [but] we think a peace deal could result in higher Russian natural gas flows and lower energy prices, but any boost to Europe’s economy – outside Russia and Ukraine – is likely to be limited.”

“A peace agreement that is broadly favourable to all sides would have macroeconomic benefits: it could set the basis for a modest pick-up in some Russian pipeline gas flows to Europe [and] the easing of Western sanctions on Russia,” although perhaps only in certain areas, such as Russia’s access to the U.S. financial system, he noted in emailed comments.

David Roche, strategist at Quantum Strategy, commented that autocratic leaders like Putin and Chinese President Xi Jinping were the ultimate “winners” of the U.S.’ newfound antipathy toward old allies and warming toward Moscow. Roche and other strategists are also cynical that Russia will be inclined to relinquish the war-oriented economy now that it has become entrenched.

“The winners are Putin and Xi. They have proven how weak and decadent democracy is,” Roche said in emailed comments.

“The U.S.’ retreat into MAGA isolationism creates a big opportunity for the ‘Axis of Autocracies’ [including Russia and China] to replace the U.S. … in terms of aid, investment and political drawing power,” Roche said in emailed comments Wednesday.

“Putin will use the ceasefire to reconstitute Russia’s armed forces. Once the fighting stops the horrific Russian losses of men and machines become daily additions to the armed forces. The Russian war machine is producing the entire equipment of the Germany’s armed forces every 6 months … Ironically there were signs of seismic cracks in the Russian war machine. It wouldn’t have taken much to push it over the brink. But that is over as soon as losses stop,” he said.

Ukraine and its European allies have been left fuming by the U.S., and Russia rekindling diplomatic ties and forging ahead with talks without their input.

Zelenskyy had already voiced his consternation at Kyiv being excluded from talks in Saudi Arabia, but his frustration emerged fully on Wednesday when he said Trump was being influenced by Russian “disinformation.”

That was when Trump hit back, saying Zelenskyy was a “dictator without elections” and had poor polling ratings despite an opinion poll released Wednesday by the Kyiv International Institute of Sociology showing that 57% of Ukrainians trust their president.

Ukraine has not held elections since Zelenskyy’s election in 2019, saying it was impracticable to hold a ballot during war and when martial law is in place.