A few days after Russia’s invasion of Ukraine, energy prices have already shot up overnight, and the conflict jeopardizes supply chains, factors that increase inflation and suppress economic growth. The use of sanctions is one of the most potent national security tools at the disposal of the United States and its partners when aiming to influence a country that is not considered an ally.
President Joe Biden and several U.S. allies, including the European Union, the United Kingdom, and Japan, have vowed to revise the restrictions on Russia as punishment for invading Ukraine. The sanctions are formulated to avoid interrupting important energy exports, which Europe mainly depends on to heat homes, power factories, and fill gas tanks. American dependency on the national security tool has left the U.S. with few other options if Putin and Russia do not respond. President Biden calls these sanctions “a big deal.”
According to the New York Times, American president Biden said he is putting sanctions to protect the citizens of his country from inflation. “I know this is hard and that Americans are already hurting. I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me. But this aggression cannot go unanswered. If it did, the consequences for America would be much worse,” Mr. Biden said. Russia has already felt the impact since the stock market has already fallen to the bottom in four and a half years this march, and its currency, the Ruble. These sanctions aim to crush Russia’s economy, prevent it from growing, increase borrowing costs, raise inflation and worsen capital outflows.
United States plans to cut Russia off from the largest bank in the US financial system and boycott Russia’s second-largest bank, freezing any assets touching the US financial system. These sanctions on Russia’s top financial entities include the complete blocking and payable-through account sanctions debt and equity restrictions on institutions holding nearly 80 percent of Russian banking sector assets. “The scale of Putin’s aggression and the threat it poses to the international order require a resolute response, and we will continue imposing severe costs if he does not change course,” the Biden administration added in a statement. Russia’s military and defense ministry are restricted from buying nearly all US items and items produced in foreign nations using specific US-origin software, technology, or equipment. Defense, aviation, and maritime technology are subject to Russia-wide restrictions to choke off Moscow’s import of tech goods.
The US sanctions will also impose Russia-wide restrictions on some US technologies produced in other countries, including semiconductors, encryption security, lasers, sensors, and maritime technologies. The effects of sanctions the U.S. announced against Russia are some of the blows that Moscow has ever faced. Still, the slow pain they inflict may not be enough to deter President Vladimir Putin from escalating his invasion of Ukraine, experts said.
