The Delegates Lounge
Join us in The Delegates Lounge, an independent podcast on world affairs based in New York City at the United Nations, the hub of global insights in plain sight. We hope you’ll come back often to listen in on some fascinating conversations hosted by J. Alex Tarquinio, a veteran journalist who writes essays for Foreign Policy from her office across the hallway from the UN Security Council chamber.
We’ll wade into the rising tide of global threats to peace and security in our discussions with the denizens of high-level diplomacy, as well as assorted scholars, scientists, soldiers, spies, and other influencers. From time to time, we’ll hit the road for sit downs with the world’s movers and shakers, whether it be at NATO’s 75th Anniversary Summit in Washington, D.C. or to parts as yet unknown.
This podcast is solely a production of The Delegates Lounge LLC, which was co-founded by the host and her husband and executive producer, Frank Radford.
As we’re a small team, we can’t respond to every message, but we promise to read your messages if you contact us at:
Or on X, formerly (and still affectionately) known as Twitter:
The Delegates Lounge
Trump Withholds his Trump Card, Sanctions, in High Stakes Summits
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
The Trump administration made an about-face on sanctions after the Alaska Summit between United States President Donald Trump and Russian President Vladimir Putin on August 15. Washington now appears reluctant to bolster sanctions as a means of coercing the Russian leader to the peace table, in part, because Putin's regime portrays Russia as an economic juggernaut weathering Western sanctions with ease. Our guest in this episode, Yale's Jeffrey Sonnenfeld, challenges that Russian narrative.
Jeffrey was instrumental in encouraging executives to pull up stakes and leave Russia after the Kremlin's full-scale invasion of Ukraine in 2022. His team devised a novel A-to-F grading system to gauge the corporate exodus. Contrary to assumptions that businesses are eager to return, he makes the case that the corruption, supply chain management nightmares, and reputational risks make Russia a toxic business environment for global companies. "Nobody wants to go back in," he states unequivocally.
As peace talks continue, he argues that this economic reality undermines Putin's negotiating position far more than is widely recognized. Sonnenfeld predicts Russia will be "out of cash by New Year's" if the war continues – information critical for understanding why sanctions remain a powerful lever in diplomatic efforts to end the conflict.
We caught up with Jeffrey while European leaders and Ukraine's President Volodymyr Zelenskyy were meeting with United States President Donald Trump in the Oval Office on August 18.
Listen Up!: We recently launched a new YouTube channel, including our previous episodes since creating The Delegates Lounge last year. For our regular listeners, we’ll keep up our playlist on Apple Podcasts, Spotify, and the other podcast apps. But YouTube lets you watch videos and subtitles translated into a variety of languages — from Arabic to Ukrainian. Find us on YouTube and hit the “Subscribe” button!
Speakers:
J. Alex Tarquinio (host) is a resident correspondent at the United Nations in New York and co-founder of The Delegates Lounge podcast. @alextarquinio of @delegateslounge on X and @thedelegateslounge on Instagram.
Jeffrey Sonnenfeld (guest) is the Senior Associate Dean for Leadership Studies and the Lester Crown Professor in Management Practice at the Yale School of Management. He’s best known as the founder and president of the Chief Executive Leadership Institute, a nonprofit educational and research institute focused on CEO leadership and corporate governance. @JeffSonnenfled of @YaleSOM on X.
References:
Our host mentioned a New York Times article in which she had quoted the guest. Here's that article.
https://www.nytimes.com/2022/10/14/business/mutual-funds/energy-markets-volatility.html
Photo Caption and Credit:
President Donald Trump greets Russian president Vladimir Putin at Joint Base Elmendorf Richardson in Anchorage, Alaska, Friday, August 15, 2025. (Official White House Photo by Daniel Torok)
Welcome to the Delegates Lounge
Speaker 1Welcome to the Delegates Lounge. Pull up a chair. I'm Alex Tarquinio, a journalist based at the United Nations here in New York City and your emcee for this podcast featuring some of the most influential minds in the world today. Settle in for some riveting tete-a-tete, available wherever you listen to podcasts.
Speaker 2Welcome back.
Special Episode on Trump Summits
Speaker 1In case you missed it, that was a hot mic moment during yesterday's diplomatic round robin at the White House. But it almost didn't need to be a hot mic moment. Evidently, united States President Donald Trump believes that he will achieve peace in Ukraine through the force of his personal relationship with Vladimir Putin peace in Ukraine through the force of his personal relationship with Vladimir Putin. Historically, the more reliable pathway to the peace table has been pressuring the aggressor, either militarily or economically. Better yet, both. Trump has effectively taken the military card off the table. He's not going to flood Ukraine with state-of-the-art military equipment to change the facts on the ground ahead of negotiations, and he has no intention of putting American boots on the ground after peace is declared. Earlier this year, the Europeans had to make a mammoth effort to convince him not to cut Ukraine off from valuable US military intelligence and to agree to sell the Europeans irreplaceable American equipment like the Patriot anti-missile system that they will then donate to Ukraine. This special episode of the Delegates' Lounge spotlights the dollars and cents at the heart of the latest summitry. In that regard, perhaps it dawned on Trump yesterday that the Europeans have a few cards of their own up their sleeves. The European Union plus, the United Kingdom have a combined population of 520 million and an annual gross domestic product worth 24 trillion, greatly exceeding that of Russia. That gives the Europeans economic clout. Moreover, as China reduces its purchases of America's government debt, the Europeans have become more important in the treasury market. Not that I'm suggesting the European leaders would be so crass as to raise this matter in the Oval Office, but there were Trump cabinet members on hand yesterday who get it, oval Office. But there were Trump cabinet members on hand yesterday who get it, not least of all Treasury Secretary Scott Besson. By willfully removing the military card from his deck, trump has made the economic card that much more important for American diplomacy.
Speaker 1As the leaders convened in the Oval Office, the European Union was preparing its 19th package of sanctions against Russia.
Economic Pressure vs Military Options
Speaker 1The Ukrainians, for their part, are making it tough for Russian ships to transit the Black Sea, an important trading route for Russia's energy and agricultural products. Meanwhile, in Washington, there's a bill winding its way through Congress that would ratchet up pressure on the Kremlin by penalizing the buyers of cheap Russian oil and gas with so-called secondary tariffs or sanctions that would leverage the full power of the American consumer the Graham and Blumenthal Sanctioning Russia Act, co-sponsored by Republican Senator Lindsey Graham of South Carolina and Democratic Senator Richard Blumenthal of Connecticut, has widespread bipartisan support in both the House and Senate, and it suits the mercantilist instincts of this White House. To recap, trump threatened secondary sanctions along the lines of the Graham-Bluenthal bill if Putin didn't agree to a ceasefire in Ukraine by August 8th. When Putin ignored that deadline, trump said let's hold a summit. Then the American president threatened very severe consequences if he didn't get a peace deal at Friday's Alaska summit. Here's a press conference at the Kennedy Center last week.
Speaker 2Will Russia face any consequences if Vladimir Putin does not agree to stop the war after your meeting on Friday?
Speaker 3Yes, they will.
Speaker 2What will the consequences be? There will be consequences.
Speaker 3Sanctions tariffs.
Speaker 2There will be, I don't have to say there will be very severe consequences.
Speaker 1Yes, the most intriguing explanation for the Trump administration's about face on sanctions after the Alaska summit came when Secretary of State Marco Rubio was making the rounds of the Sunday morning talk shows. He told CBS's Face the Nation.
Speaker 4You talk about the sanctions. Look at the end of the day, if peace is not going to be possible here and this is just going to continue on as a war, people will continue to die by the thousands. The president has that option to then come in and impose new sanctions. But if he did this now, the moment the president puts those additional sanctions, that's the end of the talks. You've basically locked in at least another year to year and a half of war and death and destruction.
Speaker 1So the Trump administration now describes tougher sanctions as an obstacle to negotiations. Our guest in this episode questions that he says the picture Putin paints of Russia's wartime economic resilience, backed up by data from Moscow's State Statistical Service Rostat, is notoriously unreliable. Jeffrey Sonnenfeld of the Yale School of Management characterizes Russia's economy as at the breaking point and gives a lot of credit to the sanctions thus far. Jeffrey has been studying the economic impacts of Russia's war on Ukraine through the chief executive leadership institute that he founded at Yale's management school. We began an extended conversation on this theme three years ago when I interviewed him for an article in the New York Times conversation on this theme three years ago when I interviewed him for an article in the New York Times. As always whenever I mention an article in this podcast by myself or others, we'll drop a link to it in the show notes.
Sanctions and White House Tactics
Speaker 1Once the Kremlin launched its full-scale invasion of Ukraine three and a half years ago, jeffrey spearheaded a push to convince foreign executives to pull up stakes and abandon the Russian market. His team at the Institute, which focuses on CEO leadership and corporate governance, even devised the A2F rating system to shame executives out of Russia. Jeffrey has advised the White House, the US State Department and Treasury Department and the Council of Economic Advisors on Russian economic sanctions. Prior to becoming the Senior Associate Dean for Leadership Studies and Lester Crown Professor in Management Practice at the Yale School of Management, he was a professor at Emory's Goizeta Business School and at the Harvard Business School. We were able to grab a few minutes with Jeffrey while the European leaders met with the president in the Oval Office. Here's our conversation Jeffrey Sonnenfeld. Thank you so much for joining us in the Delegates Lounge.
Speaker 2I'm honored to be with you. Thanks so much for the invitation, alex. It's great to see you and I must say you are the head of the curve on this topic that you have in mind today. You are ahead of all the media and most of the diplomats.
Jeffrey Sonnenfeld on Russia's Economy
Speaker 1Oh well, thank you so much. It's really wonderful to have you. I feel like it's a reunion of sorts, because we spoke when I was writing for the New York Times about the impact of sanctions on Russia right at the beginning of the full scale invasion, so you were ahead of the pack.
Speaker 1Yeah, you and your team were really helpful at that time, giving us lots of fascinating data on pipelines and regasification projects in Europe. So now let's dive right in and talk about sanctions and any other forms of economic pressure that the Trump administration could be putting on Russia right now. And I mean to recap there's first of all, there is a bill out there, there's the Graham Blumenthal bill, and also Trump has threatened to do sanctions, but after the Alaska summit on Friday, that's looking less and less likely. So tell us what you think the Trump administration could and should be doing to put economic pressure on Russia to end its war in Ukraine.
Speaker 2This is an incredibly scary time. In real time we're seeing things unfold where we hope we would not be in this position and maybe it'll be better than we think. But it is the Vladimir Putin attacked a unprovoked, an independent, a sovereign, peaceful nation. That's their neighbor as part of his imperial quest and he has in mind many other parts, if not all, of Europe. He certainly wants to rebuild this romanticized notion of a greater Russian empire that would embrace the Baltics, poland and elsewhere. It's ludicrous, it's crazy. He shouldn't even be a member of the United Nations. He's had this veto power. They were grandfathered in, they were never voted in. Everybody else had to be voted in to be a member of the United Nations Every other part of the USSR except for him. So it's bizarre.
Speaker 1Well, ukraine makes that point in Security Council meetings. They do say you know the Russian Federation representing, you know the Soviet Union, because in fact in in the original charter it refers to the Soviet Union, not Russia.
Speaker 2Good for you for knowing that Exactly. They do feel that very strongly and they're right. And it's worse yet that they're on the Security Council and they have the veto of the Security Council. They shouldn't even be there with that. And also, they aren't remotely an economic superpower, which is crazy. They are smaller than Italy. They're not a top 10 by far not the top 15 economy, and whatever they produce, it isn't anything that you or I are likely to buy. They don't have any finished industrial goods come from there that nobody uses. They don't have pharmaceutical, finance or or fashion that anybody's wearing. They're consumer goods from there.
Speaker 1I'm so glad you point that out. It's, it's. I mean. In fact they don't really make any consumer products, it's purely an extraction economy. There's the famous Senator McCain quote that it's a gas station masquerading as a country.
Speaker 2He's exactly right, it's all commodities and raw materials. It's like the old mercantile system as a colony, except they have a boss with a lot of bravado that makes them act like there's something larger. But every sector is down there 60 to 95 percent. People talk about energy. Down there, 60 to 95 percent. People talk about energy. Sure, the sanctions on energy would be a good thing. But he's actually making nothing on gas because the gas which was half, more than half of his gas, in fact considerably more than half of Putin's gas, of Russia's gas, was going to the EU. He can't sell any of that to the EU. Now A little bit is going to Serbia and Hungary, but basically 86 percent of his gas is flared off.
Speaker 1They don't have the pipelines and they don't have the infrastructure to do the. Lng.
Speaker 4Yes, good for you, you knew that.
Speaker 2We know all about.
Speaker 1LNG on this program. Yes, it's liquefied natural gas, so we don't have to go down that path.
Russia's Economic Reality Check
Speaker 2And then Germany did an amazing 180-degree pivot and built these six massive terminals and conversion plants to bring in LNG liquefied national gas, from the US and Norway and Algeria and elsewhere to pump that throughout all of Europe except the Iberian Peninsula, which already had their own LNG ports, as well as Poland and the Lithuania and Estonia and Latvia that also were independent of Russian gas. So the gas is not working and oil they're the least efficient OPEC Plus member. It cost them $46 a barrel to extract their gas, their oil, and the Saudis we are $22 a barrel, so it's more than twice as much to produce it and then for them to get it to the parts of the world that need it, it's another $20 a barrel, that's $65 a barrel. It's oil right now $61, $62 a barrel. They're at best breaking even on oil.
Speaker 2So yeah, more sanctions may be a good thing, but frankly, what most people don't understand is Russia selling oil in the global markets is not fueling the Russian war machine to any great extent. If at all Minerals, those are replaced most anywhere else in the world, whether it's not cadmium or whatever. You can get this palladium in South America, in Africa, and he's made it economically efficient now because prices have come down everywhere else, because he has inadvertently helped develop those markets, his GDP, the IMF, only the IMF, believes that GDP number because he invents the number each morning.
Speaker 1I wanted to ask you about the IMF because of course you've been highly critical of the IMF chief, kristalina Gerojeva. And I mean she says she describes it as a wartime economy and saying that's basically keeping it afloat, the wartime spending. But I mean, first there's the elephant in the room. How could you believe the Russian economic data and what do you base your analysis of? That's what her economists tell us.
Speaker 2And we actually have her economists taped. We have them videoed as they check the box on Zoom. Maybe inadvertently, but twice they did it, saying that they don't know where she gets her statements from, because it's not supported by any visibility they have into the Russian economy, because almost all the national income statistics are suppressed. You don't know what foreign direct investment is, other than it's apparently gone to zero. We don't know what the status and the health is of different financial institutions. We don't know about air travel there. Stuff that they're supposed to report they don't report. The export activities is pretty minimal in different industries. They don't report that, the imports or the exports. So we know we've gotten that data from third-party sources to triangulate to figure out how far down the Russian economy has fallen. But Putin just invents a number and he gets somebody from Rostat. He'll replace somebody and put somebody else from Rostat that will say it. It's false information that he's outstripping the UK or Germany. That economic growth is ludicrous.
Corporate Exodus from Russia
Speaker 1Well, the one. The one thing we do know in terms of economic data is that Russia's central banker, elvira Nabulina. She's keeping interest rates incredibly high. So that's also a sign of a distressed economy, isn't it generally?
Speaker 2She's even admitted that she sees no growth for next year, which is amazing that she's still alive, because you know that the number one and number two from the entire energy industry, which used to be a private industry, which she's now nationalized, is expropriated, you know. So this is now 65% state-run economy. Is that they've all fallen out of balconies windows?
Speaker 1got lost in traffic. In fact, it's because of Russia that we have the verb defenestration.
Speaker 2Yes, exactly right. So there's no part of that. Economy is strong and Russia is inconsequential into the global marketplace. Fertilizer and agriculture products, I admit, is helpful, but even Ukraine is I don't know maybe 80 percent of Russian grain production. They've had bumper crops there and the rest of the world North America, canada, us have done very, very well. And there was some concern two years ago with the drought that Putin was going to try to suggest that somehow the war with Ukraine was hurting Africa. It turns out that was not the issue. It's a distribution issue but not a production issue. So Russia is in terrible shape. They had an incredible brain drain. We know about two million highly talented tech workers that have fled Right, some to Uzbekistan. The Tashkent Industrial Park has grown four times over.
Speaker 1Well, in terms of the labor market, russia appears to have a real labor shortage at everything, at the white collar jobs, blue collar jobs. They brought in North Korean workers, not not only as soldiers on the battlefield, as we know, but as workers to replace Russians who may be serving on the front or fled Russia. You talk about the white collar jobs. That's separate from sanctions, that's more war related. But how does that put pressure on the economy?
Speaker 2Oh no, that's exactly right. They don't have the talent that they would need. That so the technological talent has disappeared. It's nowhere close to what Ukraine has for technological talent, not to mention other parts of the world. And the the outflow of capital it's been enormous from the oligarchs. They themselves fleeing, but something like two thirds of their millionaires have left, or half the millionaires have left.
Speaker 1Is that one of the reasons also, you think, for the insanely high interest rates? I think they were at 21 percent. Is that another reason to try and reverse the capital flight?
Speaker 2Yeah, I think that's an effort to try to block that. So this is an economy that's in distress. They're not to be a ring buoy from President Trump If this war were to continue. It's certainly draining Ukrainian soldiers, but it's been. You know, four Russians killed for every one Ukrainian killed. So there's a lot of murder, a lot of death on both sides in battle, but they'll be out of cash by the New Year's in Russia.
Speaker 2So they're in much worse shape economically. They're running enormous deficits, but so do we, so does a lot of the world. But there's somebody who's there to bail us out that's buying our debt? There's nobody. Not even China is investing in Russia. China is not investing in and paying off their debt. You don't have Bank of China or ICBC investing in there. In fact, even the petrochemical companies in China Cytocam and Cynopec are not in China, which is amazing.
Speaker 2So they're in terrible shape. There's no investments in tomorrow's industries. There's no investment in cyberspace and cryptocurrencies and AI, let alone sustainability and safe energies for the future. But just in raw materials is all they're producing, is how to harvest that, safe energies for the future. But just in raw materials is all they're producing, is how to harvest that, and even at that they're having trouble, which is why they were trying to sue Exxon and other extractive companies to try to keep them from having pulled out, because they need that technology, because they're so antiquated in their own manufacturing and extractive industry technologies, they're in big trouble. It's a giant landmass, bigger than China, bigger than Canada, but not a lot of people and there's really no value added at all coming out of their products. But also something which could matter is that, the $300 billion of frozen assets, that the US has only $5 or $6 billion of it, but that we could give that today.
Speaker 1Convincing the CEOs to leave Russia. You played a big role in that with the A to F grade. Now Trump has been saying he wants business to have opportunities in Russia. Is there any interest in the CEOs you've been working with on returning?
Speaker 2No, the CEOs who pulled out initially surprised me, having been working on corporate social impact for 45 years. That first book, corporate Views of the Public Interest, my first book on it up there is that I would not have predicted that it would have been big oil, big tech and professional services as the first movers to leave, but for various reasons, none of them were usually on the frontiers of social change. It was usually the consumer goods companies. But in this case that's who led and everybody that followed is that no companies have an interest in going back in. It wasn't as much as 10% as any company's global revenues except McDonald's, and they have no interest in going back in. And that's just the revenues.
The Future of Russian Economy
Speaker 2In terms of profitability, it's a hard place to do business because of the corruption and because, of course, of Putin's murder of just the 100 oligarchs alone. Is that that's just so awfully intimidating? It's a hard place for supply chain management. It's an impossible place for financial flows, operational issues, reputation. Nobody wants to go back in. And it wasn't that significant a market to start with. They weren't making money at it. So no, there's no interest in wanting to go back in. The only companies that vacillated, carlsberg and Heineken, had misled us in our ratings. But we were doing a rating with 50 experts going through this 24-7, checking to see this constantly. There's nobody has any interest in going back into Russia. They all got surges in their market value for getting out of there. The market appreciated.
Speaker 1When you talk about the ratings, you gave them an A to F grade on their reaction to Russia. Yes, an A to F grade, the A's and the B's pulled out entirely.
Speaker 2The A's have no interest in going back in ever the B's if Putin leaves they might go back in. The C's are partially in there but and the D's? They've cut out future investment and the F's are going ahead full throttle and a lot of that are the Middle Eastern airlines, and some Japanese and Indian companies that were disappointed are there and, frankly, a few US companies that were surprised are still there.
Speaker 1We'd love to have you come back and talk about those 8F companies. We would love to do that when you have time. Jeffrey, thanks so much again for spending time with us today in the Delegates Lounge.
Speaker 2I thoroughly enjoyed it. We turned the stone over a lot of interesting ways.
Speaker 3And that's it from the Delegates Lounge. We'd like to thank our esteemed guests, who've graciously allowed us to share their hard-earned insights into what really matters. And then there's you, our listeners, who we hope are sufficiently edified to clamor for more of the same. Do drop in for a weekly episode on Thursday, or, from time to time if we're on the road, for special events, in which case there'll be a bonus episode. Subscribe wherever you listen to podcasts and, if you like what you've heard, please take a moment to rate or review the show, as it helps others who share your abiding interest in world affairs to find their way to the Delegates Lounge. You can connect with us on many popular social media platforms or reach out to us directly at infothedelicateloungecom. We're a small team so we can't respond to every message, but we will read them. Our show this week was written and produced by the host and by yours truly executive producer, frank Radford. Until next time, keep calm and curious.