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The Logic Behind the US Sanctions

Posted on the 26 February 2022 by Geetikamalik

Given the clear political attitude, both in the administration and cross-line party in the US, that American forces will not be sent to Ukraine to fight Russia, sanctions emerged as the most preferred alternative to fight Russia.

With the aim stated to ensure Russian aggression in Ukraine is a “strategic failure”, the US has announced what is called “the most impact and significant sanctions” ever done in terms of financial consequences, and “exepressive set and unprecedented. Export restrictions” Developed in “historically closed coordination” with its allies.

Following up on the announcement of President Joe Biden about sanctions on Thursday, the key administrative architect of the sanctions regime, Daleep Singh, representative of the national security advisor for the international economy, said that the government has warned that if Vladimir Putin invaded Ukraine, there would be direct and profound costs for the financial system Russia, economy, technology base and strategic position.

“The strategic success in the 21st century is not about physical land seizure. That is what Putin did. In this century, strategic strength is increasingly measured and carried out by economic forces, the sophistication of technology and your story – who you are, what your value is, can you attract ideas And talent and good intentions. At each step, this will be a failure for Russia, “Singh said.

He added that economic sanctions, put together, will be translated into “higher inflation, higher interest rates, lower purchasing power, lower investment, lower productive capacity, lower growth in Russia”, while Export restrictions will “imitate” military ability imprictions and will also deny exports throughout Russia to sensitive and up-to-date technology, mainly targeting the defense, aerospace, and maritime sector “.

Given the clear political attitude, both in the administration and cross-line party in the US, that American forces will not be sent to Ukraine to fight Russia, sanctions emerged as the most preferred alternative to fight Russia.

Three challenges.

But the US, while designing sanctions, must remember three factors.

One of them, sanctions have the possibility of triggering a surge in energy prices – which will also affect American consumers, which have been wrestling with inflation that have created political challenges for Biden in the country. Biden has recognized that there will be fees for the American community, but emphasize that the aim is to minimize costs for America and its allies, while maximizing the economic impact of the Russian economy.

Singh said, “Obviously, our sanctions are not designed to cause disruption to the current energy stream of Russia to the world. We have carved energy payments in time to enable the orderly transition from this flow from agreed institutions, and we have provided another license for Providing an orderly business increase. “

Two, the US has designed sanctions with allies in Europe – but this means that together, they have not been able to approve a few steps on the table, most clearly reflected in the absence of an announcement to cut Russian banks from accessing the Swift system. Banks use this to communicate money transfers and other instructions and systems are the backbone cross-border transactions of all kinds.

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