Russia is reducing its investments in the US economy in response to Washington's fresh sanctions, warning the two countries are on the brink of 'economic war'. Russia says it would not ban US companies, nor stop using the dollar. But it's already reducing its stock of US Treasury bonds. Our correspondent Dan Ashby has more from Moscow.

Russian-US relations may well be getting as icy as the fish in its Eastern seas, but the scope of possible new US sanctions is rattling industry and politicians alike. On his trip to the East, Prime Minister Medvedev had this warning:

DMITRY MEDVEDEV RUSSIAN PRIME MINISTER "If something like a ban on bank operations or currency use follows, it will amount to a declaration of economic war. And it will warrant a response with economic means, political means and, if necessary, other means. Our American friends should understand that."

In Moscow, the Government is waiting to find out how bad the sanctions will be.

DAN ASHBY MOSCOW "The truth is that the Kremlin does not want an economic war with the US- there are plenty of sanctions already, the Rouble is falling and Russia is far more exposed to the US than vice versa. But Russia has a long-standing policy of tit for tat - because it feels if it does not deter Washington, there will be more sanctions ahead."

Already Russia has started reducing its holdings of US treasury bonds, and possible counter sanctions include banning US airlines in Russia airspace, and refusing to sell rocket engines to NASA. But unless the US changes course, the Rouble could slide further.

PYOTR MILOVANOV FINANCIAL ANALYST "The main difficulty would be if they introduce trade sanctions or there's an embargo or any sort of restrictions on our exporters, like oil traders. But I don't think we should expect that type of sanction, because Russia is one of the largest oil exporters, and cutting it off from the global market would lead to a global hike in oil prices and major volatility. It could mean some very unpleasant times for the global economy."

So there are choppy days ahead for Russia and its US relations. Everyone is waiting to see if the waters will calm - or whether an economic storm is brewing. Dan Ashby, CGTN, Moscow.