The US Sanctions Russia. Then It Pays to Fix the Damage.

The fertilizer case is the cleanest loop. In June, President Trump suspended countervailing duties on phosphate fertilizer imports from Morocco and Russia, estimating the move would save American farmers between $1.82 billion and $2 billion ^[1]. The duties had been imposed to penalize Russian exports. But by the time they were lifted, 70% of American farmers could not afford fertilizer, diesel costs had spiked 46%, and a $12 billion farm relief package had been largely consumed by the same energy-driven inflation it was meant to offset ^[2]. The suspension was a retreat from containment — an acknowledgment that the tariffs had raised domestic costs past the point the farm economy could bear. Then, in July, the administration launched the FIELDS program: $500 million in grants for domestic fertilizer manufacturing, triggered directly by the Strait of Hormuz closure during the Iran war that had sent fertilizer prices spiraling ^[3]. Agriculture Secretary Rollins had already proposed using "tens of billions of dollars derived from tariffs and trade deals" to reshore fertilizer production ^[4]. The sequence was complete: tariffs on Russian phosphate raised costs, the Iran war — part of the same containment architecture — spiked them further, the duties were suspended to stop the bleeding, and tariff revenue was earmarked to build domestic capacity so the US would not need Russian phosphate in the first place. Containment created the shock; the shock created the subsidy; the containment mechanism was supposed to fund it. This pattern repeats, in compressed form, across nearly every front of the US containment strategy. The Department of Energy awarded $2.7 billion to three companies to build domestic uranium enrichment capacity, explicitly to replace Russian nuclear fuel ahead of a 2028 import ban ^[5]. The ban is the containment; the $2.7 billion is the subsidy the ban made necessary. The DOE committed $500 million to expand domestic critical mineral processing, with Energy Secretary Chris Wright framing it as reducing reliance on "hostile foreign actors" ^[6]. Trump banned defense sourcing of critical minerals from China, Russia, Iran, and North Korea while creating an aluminum tariff incentive that lets companies investing in US smelters import primary aluminum at half the Section 232 rate, and on Monday announced another $3 billion for domestic critical minerals projects — the same day the Senate passed 100% tariffs on Russian oil buyers ^[7][8][9]. The restriction and the subsidy arrived together. The administration increased fossil fuel subsidies by $4 billion, to $34.8 billion total, while canceling $35 billion in renewable projects, explicitly framing the move as reducing reliance on foreign energy chokeholds like the Strait of Hormuz ^[10]. It granted copper smelters a two-year exemption from air pollution rules, stating the rollback would prevent closures that "increase reliance on foreign-controlled processing capacity" ^[11]. It has drawn 66 million barrels from the Strategic Petroleum Reserve since the Iran strikes began, pushing the reserve to a 40-year low of 349 million barrels, to suppress gasoline prices that the Hormuz closure drove upward ^[12]. In the fertilizer case, the administration has explicitly said it will use tariff revenue to fund the reshoring. Whether the same holds for uranium enrichment, critical minerals, or the Strategic Petroleum Reserve drawdown is less clear — the administration has not said so. The administration does not treat any of this as a contradiction. Peter Navarro, the president's senior counselor for trade and manufacturing, made the integration explicit.

And that issue has been resolved. — Peter Navarro

In this framing, the tariff that raises costs and the subsidy that offsets them are not opposing forces. They are two stages of the same policy — the pressure and the response, administered by the same government, funded in part by the same revenue. Then there is the military dimension, where the strategy becomes actively counterproductive. The Iran war closed the Strait of Hormuz. The closure drove Russian oil export prices from under $40 a barrel to $62, letting Moscow bypass the Western price cap designed to limit its oil revenue.

What is happening today on the European markets is, of course, above all the result of the mistaken policies of European governments in the energy sphere. — Vladimir Putin

The US, by fighting one adversary, enriched another, even as it spent billions subsidizing domestic industry to manage the fuel and fertilizer prices the war had inflated. Trade expert Sarah Helton described how the administration uses Section 232 tariffs.

We’ve understood, from the very beginning, that President Trump has keen interests on anyone that wants to come to the United States and invest, come. — Sarah Helton

The same logic — tariffs as the first move, domestic investment as the second — operates across agencies and across the boundary between trade policy and sanctions. None of this means the strategy is failing on its own terms. Russia's oil export revenues hit near five-year lows of $13.5 billion in August 2025, and by January 2026 state gas and oil tax revenue had fallen to levels not seen since the pandemic ^[13]. The IEA projects a decline of 1 million barrels a day in Russian production, and some analysts see output falling over 20% by 2030 as sanctions block access to advanced drilling technology and wartime labor shortages hollow out the workforce ^[14]. The containment strategy is degrading Russia's long-term energy capacity. That is its objective, and it is working. The question is what the degradation costs, and who pays. The answer, so far, is that the costs are generated by the strategy itself — in price shocks, in supply disruptions, in the depletion of strategic reserves — and that the government funds at least some of the response with revenue from the same restrictions that created the need. The strategy is not a contradiction the administration has failed to notice. It is a design the administration has named aloud. Whether the design can sustain both halves of itself — the pressure and the response — is the question the evidence does not yet answer.