Russia Demands U.S. Return Properties After Talks End Without a Deal

Russia stepped up pressure on the U.S. to return seized diplomatic compounds after talks ended without a deal, in a dispute that’s become a test of whether Donald Trump and Vladimir Putin can convert the personal rapport of their initial meeting into improved relations.

The Russian Foreign Ministry said it “reserves the right to retaliate based on the principle of reciprocity” in a statement Tuesday, after U.S. Undersecretary of State Thomas Shannon and Russian Deputy Foreign Minister Sergei Ryabkov failed to break the deadlock at the talks in Washington.

The discussions were “tough, forthright and deliberate, reflecting both parties’ commitment to a resolution” on issues that have “strained the relationship,” the State Department said in a statement on its website Tuesday. “It is clear that more work needs to be done.”

Russia’s made increasingly strident demands for the issue to be resolved since it was discussed at Trump and Putin’s first official meeting, which stretched for more than two hours at the Group of 20 summit in Hamburg this month. It’s threatening to retaliate by seizing U.S. embassy property in Moscow and expelling diplomats. The confrontation is putting Trump in a bind as he seeks to strengthen relations with Putin while also battling investigations in Washington into whether members of his campaign team colluded with Russia during last year’s presidential elections.

‘Retaliatory Steps’

“The longer the Americans persist, the less chance there’ll be of finding a solution that won’t also infringe on their interests,” Ryabkov said Tuesday, according to the RIA Novosti news service. He said he’d warned Shannon at Monday’s talks that Russia may take “practical retaliatory steps” soon.

Putin broke with tradition and refrained from responding when then-President Barack Obama expelled 35 Russian diplomats and shut down the two compounds in December in response to the election hacking that U.S. intelligence agencies blamed on Russia. Trump hailed Putin’s decision at the time on Twitter as a “great move” and said “I always knew he was very smart!”

However, nearly six months after Trump took office pledging to repair ties that all but collapsed under Obama, Russia’s patience is running out over his failure to reverse the measures.

‘Severe Crisis’

The two confiscated properties at the heart of the dispute are a former governor’s mansion near Oyster Bay, Long Island and a sprawling 45-acre compound on the Corsica River in Maryland that includes a Georgian-style mansion with a swimming pool, tennis court and Russian steam bath. 

Russian Foreign Ministry spokeswoman Maria Zakharova said the seizure of the two properties had deprived children of Russian diplomats of their annual summer camps and weekend breaks. She dismissed U.S. media reports that American agents had discovered traces of dismantled antennas, computers and other spy equipment at the compounds.

The dispute shows there’s “a severe crisis in relations” between Russia and the Trump administration, according to Fyodor Lukyanov, head of the Foreign and Defense Policy Council, an advisory body to the Kremlin. “An absolutely small thing has become fundamental for both sides” and may create a spiral of tit-for-tat responses, he said.

The Trump administration may return the country houses to Russia because “we want to give collaboration, cooperation a chance,” in order to secure progress on issues such as resolving the war in Syria, Sebastian Gorka, a deputy assistant to the president, told CNN on Thursday.

Russia canceled a previous meeting between Ryabkov and Shannon in St. Petersburg last month after the U.S. imposed new sanctions on Russian companies and individuals over the conflict in Ukraine.

— With assistance by Henry Meyer