Putin said he regretted the deterioration in US-Russia ties because if the two nations acted together they would be "much more able to solve the acute problems which exist around the world and in Russia and the United States", such as combating terrorism, tackling environmental issues, fighting illegal migration and organized crime, and helping promote economic growth.
The Russian Foreign Ministry announced in a statement on Friday that in response it is ordering the U.S. Embassy in Russia to reduce the number of its diplomats by September 1.
Russia's foreign ministry said on Friday that the USA was "stubbornly taking one crudely anti-Russian step after another, using the utterly fictitious pretext of Russian interference in its internal affairs".
Friday's move by the Russian government, coming the morning after the U.S. Senate approved sweeping sanctions against Russia, as well as North Korea and Iran, signaled that this honeymoon was over.
Republican Sen. Bob Corker announced the deal in a statement late Wednesday, saying it came after discussions with House Majority Leader Kevin McCarthy.
"Russian President Vladimir Putin, speaking ahead of the Senate vote, accused US lawmakers of 'insolence' and promised retaliation if the sanctions become law", as NPR's Scott Neuman reported Thursday.
Moscow is already the subject of tough U.S. sanctions over its annexation of Crimea from Ukraine and support for a bloody insurgency in the country.
The sanctions bill penalizes Russian Federation over its meddling in the election as well as its actions in Syria and Ukraine. But Putin said he would wait, in an apparent effort to build trust with Trump and hope that the newly elected president would reverse the decision after his inauguration.
The bill would affect a range of Russian industries and might further hurt the Russian economy, already weakened by 2014 sanctions imposed after the Ukraine crisis. He particularly objects to a passage barring presidential interference aimed at easing the sanctions.
According to the bill, US President Donald Trump would be barred from easing the Russian Federation sanctions without first getting permission from Congress, a demand that could imperil his bid for better relations with Moscow.
"The United States under the absolutely invented pretext of Russian interference in their internal affairs takes one grossly anti-Russian action another", it said.
Moscow responded to the news quickly, ordering a cut in the number of USA diplomats in Russian Federation and closing the United States embassy's recreation retreat.
"Either if [Trump] vetoes it or if he just leaves it, it will become law and so I can't imagine from a political standpoint that he would want to have egg on his face on this thing so I think he will sign it", he said.
The bill, which includes a provision that allows Congress to stop any effort by Trump to ease existing sanctions on Russian Federation, will now be sent to the White House for Trump to sign into law or veto.
In addition, the European Union broadened sanctions against Russia after the shooting down of Malaysia Airlines flight MH17 in eastern Ukraine in July 2014, blamed by the European Union on Russian-backed rebels.