Trump signs Russia sanctions bill, Moscow calls it 'trade war'

WASHINGTON, Aug 2 (Reuters) - U.S. President Donald Trump grudgingly signed into law new sanctions against Russia on Wednesday, a move Moscow said amounted to a full-scale trade war and an end to hopes for better ties with the Trump administration.

Congress overwhelmingly approved the legislation last week, passing a measure that conflicts with the Republican president's desire to improve relations with Moscow.

Trump signed the bill behind closed doors, without the fanfare that has customarily accompanied his signing of executive orders. He criticized the measure as infringing on his powers to shape foreign policy, and said he could make "far better deals" with governments than Congress can.

Russian Prime Minister Dmitry Medvedev called the sanctions tantamount to a "full-scale trade war," adding in a Facebook post that they showed the Trump administration had demonstrated "utter powerlessness."

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Leaders Donald Trump and Vladimir Putin meet at the G-20 in Hamburg. 

(Image: Reuters video)

Leaders Donald Trump and Vladimir Putin meet at the G-20 in Hamburg. 

(Image: Reuters video)

HAMBURG, GERMANY - JULY 07: In this photo provided by the German Government Press Office (BPA) Donald Trump, President of the USA (left), meets Vladimir Putin, President of Russia (right), at the opening of the G20 summit on July 7, 2017 in Hamburg, Germany. The G20 group of nations are meeting July 7-8 and major topics will include climate change and migration. (Photo by Steffen Kugler /BPA via Getty Images)
HAMBURG, GERMANY - JULY 07: In this photo provided by the German Government Press Office (BPA), Donald Trump, President of the USA (C) meets Vladimir Putin, President of Russia and President of the EU Commission Jean-Claude Juncker (L) during the G20 Summit on July 7, 2017 in Hamburg, Germany. The G20 group of nations are meeting July 7-8 and major topics will include climate change and migration. (Photo by BPA via Getty Images)
HAMBURG, GERMANY - JULY 7, 2017: Melania Trump (L), First Lady of the United States, and Russia's President Vladimir Putin shake hands as they meet on the sidelines of a G20 summit. Mikhail Klimentyev/Russian Presidential Press and Information Office/TASS (Photo by Mikhail Klimentyev\TASS via Getty Images)
HAMBURG, GERMANY - JULY 07: International leaders attend the group photo on the first day of the G20 economic summit on July 7, 2017 in Hamburg, Germany. The G20 group of nations are meeting July 7-8 and major topics will include climate change and migration. (Photo by Sean Gallup/Getty Images)
HAMBURG, GERMANY - JULY 07: World leaders pose for a family photo during the G20 summit on July 7, 2017 in Hamburg, Germany. Leaders of the G20 group of nations are meeting for the July 7-8 summit. Topics high on the agenda for the summit include climate policy and development programs for African economies. (Photo by Matt Cardy/Getty Images)
German Chancellor Angela Merkel takes part in a family photo along with French President Emmanuel Macron, U.S.President Donald Trump, Indonesia's President Joko Widodo, Mexico's President Enrique Pena Nieto, South African President Jacob Zuma, Argentina's President Mauricio Macri, Chinese President Xi Jinping, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan, Brazilian President Michel Temer, South Korea's President Moon Jae-in, Italian Prime Minister Paolo Gentiloni, Canadian Prime Minister Justin Trudeau, India's Prime Minister Narendra Modi, Japanese Prime Minister Shinzo Abe, Australian Prime Minister Malcolm Turnbull, Britain's Prime Minister Theresa May, European Council President Donald Tusk, European Commission Jean-Claude Juncker, U.N. Secretary-general Antonio Guterres, Norway's Prime Minister Erna Solberg, Netherlands' Prime Minister Mark Rutte, Senegal's President Macky Sall, Singapore's Prime Minister Lee Hsien Loong, Spanish Prime Minister Mariano Rajoy, Vietnamese Prime Minister Nguyen Xuan Phuc, Saudi Arabia Minister of State Ibrahim Abdulaziz Al-Assaf, Economic Cooperation Organization (ECO) Secretary Jose Angel Gurria, World Trade Organization (WTO) Director Roberto Azevedo, International Monetary Fund (IMF) Managing Director Christine Lagarde, International Labour Organization (ILO) Director Guy Ryder, World Bank President Jim Yong Kim, Financial Stability Board (FSB) President Mark Carney and other leaders at the G20 leaders summit in Hamburg, Germany July 7, 2017. REUTERS/Wolfgang Rattay
French President Emmanuel Macron, U.S. President Donald Trump, Indonesia's President Joko Widodo, Mexico's President Enrique Pena Nieto, South African President Jacob Zuma, Argentina's President Mauricio Macri, German Chancellor Angela Merkel, Chinese President Xi Jinping, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan, Britain's Prime Minister Theresa May, Australian Prime Minister Malcolm Turnbull, Japanese Prime Minister Shinzo Abe, India's Prime Minister Narendra Modi, Canadian Prime Minister Justin Trudeau, Italian Prime Minister Paolo Gentiloni and other leaders pose for a family photo at the G20 leaders summit in Hamburg, Germany July 7, 2017. REUTERS/Wolfgang Rattay
US President Donald Trump and Russia's President Vladimir Putin hold a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump and Russia's President Vladimir Putin hold a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump and Russia's President Vladimir Putin shake hands during a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump and Russia's President Vladimir Putin hold a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump (R) and Russia's President Vladimir Putin shake hands during a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump (C-R) and Russia's President Vladimir Putin (C-L) hold a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump (R) and Russia's President Vladimir Putin shake hands during a meeting on the sidelines of the G20 Summit in Hamburg, Germany, on July 7, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Russia's President Vladimir Putin talks to U.S. President Donald Trump during their bilateral meeting at the G20 summit in Hamburg, Germany July 7, 2017. REUTERS/Carlos Barria
Russia's President Vladimir Putin talks to Melania Trump during the official dinner at the Elbphilharmonie Concert Hall during the G20 summit in Hamburg, Germany July 7, 2017. REUTERS/Kay Nietfeld,Pool
HAMBURG, GERMANY - JULY 07: Russian President Vladimir Putin (L) talks to the US first lady Melania Trump (R) as they attend a state banquet in the Elbphilarmonie concert Hall on the first day of the G20 economic summit on July 7, 2017 in Hamburg, Germany. The G20 group of nations are meeting July 7-8 and major topics will include climate change and migration. . (Photo by Felipe Trueba - Pool / Getty Images)
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"The hope that our relations with the new American administration would improve is finished," he wrote.

Trump's litany of concerns about the sanctions, which also affect Iran and North Korea, raised the question of how vigorously Trump will implement them regarding Russia.

"While I favor tough measures to punish and deter aggressive and destabilizing behavior by Iran, North Korea, and Russia, this legislation is significantly flawed," Trump said in a message to lawmakers known as a signing statement. He also issued a statement for the press about the bill.

The new law allows Congress, which passed the measure to punish Russia over interference in the 2016 U.S. presidential election and the annexation of Ukraine's Crimea, to halt any effort by Trump to ease sanctions on Russia.

His hands were tied after the Republican-controlled Congress approved the legislation by such a large margin last week that any presidential veto of the bill would have been overridden.

The legislation provoked countermeasures by Russian President Vladimir Putin, who said on Sunday that the U.S. diplomatic mission in Russia must reduce its staff by 755 people. Russia is also seizing two properties near Moscow used by American diplomats.

Trump has repeatedly said he wants to improve relations with Russia. That desire has been stymied by U.S. intelligence agencies' findings that Russia interfered to help the Republican against Democratic presidential candidate Hillary Clinton.

U.S. congressional panels and a special counsel are investigating. Moscow denies any meddling and Trump denies any collusion by his campaign.

MIXED SIGNALS ON RUSSIA

Republican House of Representatives Speaker Paul Ryan welcomed the signing, saying it would send "a powerful message to our adversaries that they will be held accountable."

In his statements on the sanctions law, Trump complained about what he said was congressional infringement on the president's constitutional power to set foreign policy, saying the law reflected congressional "preferences" rather than a legal mandate.

"It is flagging those areas where the administration sees itself as having wiggle room to underenforce the law by citing claimed constitutional concerns," said Harold Koh, a Yale Law School professor who was a legal adviser to the State Department during the Obama administration.

The House's top Democrat, Nancy Pelosi, said the signing statement "raises serious questions about whether his administration intends to follow the law."

Trump said he was elected partly because of his successes in business, adding, "As President, I can make far better deals with foreign countries than Congress."

Trump's signing statement was the latest in a series of mixed signals from the administration on Russia.

"I feel like there's several policies being implemented at once, and they're not very compatible with one another. This is one more," said Olga Oliker, a Russia expert at the Center for Strategic and International Studies, a think tank based in Washington.

Vice President Mike Pence, touring Baltic countries adjacent to Russia, has followed a hawkish line. Pence said Trump's signing of the legislation would show that Congress and the president were "speaking with a unified voice" on Russia.

However, Secretary of State Rex Tillerson, like Trump, has been critical of the legislation.

"The action by the Congress to put these sanctions in place and the way they did, neither the president nor I were very happy about that," Tillerson said on Tuesday.

TARGETING THE ENERGY SECTOR

The sanctions will affect a range of Russian industries and might further hurt Russia's economy, already weakened by 2014 sanctions imposed after the annexation of Crimea.

Besides angering Moscow, the legislation has upset the European Union, which has said the new sanctions might affect its energy security and prompt it to retaliate if needed.

Several provisions of the law target the Russian energy sector, with new limits on U.S. investment in Russian companies. American companies also would be barred from participating in energy exploration projects where Russian firms have a stake of 33 percent or higher.

The legislation includes sanctions on foreign companies investing in or helping Russian energy exploration, although the president could waive those sanctions.

It would give the Trump administration the option of imposing sanctions on companies helping develop Russian export pipelines, such as the Nord Stream 2 pipeline carrying natural gas to Europe, in which German companies are involved. (Reporting by Roberta Rampton and Patricia Zengerle; Additional reporting by Doina Chiacu, Susan Heavey, Caren Bohan, Lawrence Hurley in Washington, Michelle Nichols at the United Nations and Alexander Winning in Moscow; Writing by Frances Kerry; Editing by Caren Bohan and Jonathan Oatis)

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