On Wednesday, the White House announced more sanctions on Russia for their continued aggression against Ukraine. The new sanctions will now target two of Russia’s largest banks, Sberbank and Alfa Bank.
In addition, the US will also issue penalties against Russian President Vladimir Putin’s adult children.
More Sanctions Will Increase Russia’s Economic Isolation
In a speech to North America’s Building Trades Unions on Wednesday, Biden yet again accused Russia of war crimes. He said that the new penalties will further strain the Russian economy.
“We’re going to further increase Russia’s economic isolation,” Biden said. “The United States will continue to stand with the Ukrainian people in their fight for freedom.”
By applying more sanctions, the Biden administration hopes to further increase the financial pressure against Russia. The country’s invasion of Ukraine is now in its second month without any resolution in sight.
Earlier, the US and its allies imposed initial sanctions on Russia, including freezing overseas assets and cutting them off from international banking networks.
Keeping The Pressure On Russia
New sanctions will now target large Russian banks Sberbank and Alfa Bank. The US now prohibits all inbound investment in Russia by any Americans.
More sanctions also apply to several state-owned Russian enterprises, which include Russian shipbuilding and aircraft conglomerate.
In addition, there will also be sanctions imposed on family members of Russian Foreign Minister Sergei Lavrov and other senior Kremlin officials. These bans are currently being coordinated with Group of Seven and European Union members.
But, Are Sanctions Working Right Now?
Even as the Biden administration continues to apply more sanctions, questions remain on how effective they are in stopping Russia.
Moscow’s military troops remain in Ukraine without any idea of when or how this incursion ends. Earlier, the Russian ruble crashed during the first wave of economic sanctions.
However, it took little time for the ruble to recover its value. That’s because sanctions against Russia do not include its oil and gas exports.
Europe famously depends on Russian energy exports to heat homes and fuel vehicles. Russia continues to earn billions in oil and gas sales.
This includes increasing its exports to other non-Western countries such as China and India. However, the US banned Russian oil and gas imports, but the trade volume is too little to make a big impact on Moscow’s economy.
Even as Ukrainian president Volodymyr Zelensky presses US and Western allies to shun all Russian energy exports or restrict trading, nobody has yet committed to doing so.
Russia Continues To Trade Oil and Gas
Daniel Glaser, global head of jurisdictional services at K2 Integrity, thinks that sanctions are lacking at this point. The “US and EU represent a significant tightening of an already tough set of measures,” he said.
“However, given the nature of the atrocities being committed in Ukraine, it is fair to ask if these measures go far enough. Oil and gas remain untouched and Russia continues to have access to the international financial system.”
Meanwhile, White House officials insist that the trade sanctions are working despite what critics say. Officials say that the Russian economy is bound to contract by 15% this year.
If it happens, this will become the single biggest decline in Russia’s economy since the fall of the Soviet Union in 1989.
In addition, administration officials say that inflation in Russia rises an average of 2% a week. This roughly translates into a 200% inflation when compounded over a year.
Missing the Forest For the Trees
White House National Economic Council Director Brian Deese met with reporters Wednesday morning at the Christian Science Monitor event.
He said that anybody thinking that Russia is bouncing back is “I think missing the forests for the trees. They are completely ostracized,” he remarked.
Watch the ABC News video reporting that the US and its allies impose more sanctions on Russia:
Do you think sanctions are working against Russia? Will Russia abandon its plans to subjugate Ukraine at any point this year?
Tell us what you think. Share your thoughts in the comments section below.