Earlier on Wednesday, the Kremlin said it regrets the new US sanctions against Russian Federation and warned of possible retaliation.
On Tuesday, the U.S. Treasury Department announced additional sanctions on Russia and pro-Russian separatists in eastern Ukraine. "Our targeted sanctions were imposed in response to Russia's ongoing violation of the sovereignty and territorial integrity of its neighbor, Ukraine".
The move by the Trump administration came days after US Senate passed new sanctions on Russia, a strong congressional response to alleged Russian meddling of the 2016 US presidential election.
European Union agreed to roll over economic sanctions against Russian Federation for another six months because Moscow has failed to meet its Ukraine ceasefire commitments.
Swiftly reacting to the blacklisting, Moscow said it was cancelling scheduled talks between US Under Secretary of State Thomas Shannon and Deputy Foreign Minister Sergei Ryabkov aimed at removing "irritants" in Russian-American relations.
According to the United States Finance Ministry sanctions related to the situation in the east of Ukraine will remain in force until Russian Federation does not comply its obligations under the Minsk agreement.
Euro rallies, weak dollar lifts oil; stocks slip
By late afternoon it was down 0.6 percent at 25,683.50 while Japan's benchmark Nikkei 225 index lost 0.5 percent to 20,130.41. This was very hawkish for the euro and the simmering strength helped it to push the pair higher towards 1.1250 and beyond.
A day earlier, the ministry abruptly announced the cancelation of talks between Lavrov's deputy, Sergei Ryabkov, and a top U.S. State Department diplomat, Tom Shannon.
The Crimea sanctions prohibit certain exports and imports, and ban investment and tourism services by EU-based companies there. "Any new attempts to make Russia "bow down" will be just as futile", the Russian official stated.
But Ryabkov, in the same statement on Wednesday, accused the United States of failing to propose anything tangible to improve relations.
State Department Spokesperson Heather Nauert said that the U.S. regretted Russia's decision to cancel the talks, adding that the package of sanctions issued Tuesday only reinforced those already in place. The sanctions were put in place in response to Russia's continued aggression against Ukraine and the plan is to uphold the sanctions until Russian Federation fully honors its obligations according to the Minsk Agreement.
Other Russia scholars point out that Putin has particular domestic considerations that could have repercussions for the Trump White House.
In addition to the economic and Crimea measures, the European Union has also imposed asset freezes and travel bans on Ukraine and Russian figures held responsible for supporting the rebels.