As a full-scale Russian invasion of Ukraine has ravaged critical infrastructure in the country and forced Ukrainian citizens to flee for their lives, President Joe Biden announced the most severe sanctions yet against Russia and its leaders—with a warning that further escalation of the war would result in “severe” economic costs.
“We will limit Russia's ability to do business in dollars, euros, pounds, and yen, to be part of the global economy…. We’re going to stop the ability to finance and grow the Russian military,” Biden said in remarks from the East Room of the White House on Thursday afternoon. “We're going to impair their ability to compete in the high tech 21st-century economy. We've already seen the impact of our actions on Russia's currency, the ruble, which early today hit its weakest level ever, ever in history.”
For weeks, Biden has vowed that an attempted occupation of Ukraine would provoke “swift and severe” penalties against Russian officials and financial institutions. The first tranche of economic punishment against the Kremlin, announced in response to Russia’s recognition of the “independence” of two separatist regions in southeastern Ukraine, targeted Russia’s ability to operate in Western financial markets, as well as some of Russia’s wealthiest and most powerful oligarchs.
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The sanctions—announced in concert with similar measures by the Group of Seven (G7) countries and the European Union, which ranged from bans on the Russian airline Aeroflot from the United Kingdom to Germany’s decision to put the Nord Stream 2 natural gas pipeline on hold, perhaps permanently—have been designed to “maximize a long term impact on Russia” Biden said.
In a statement ahead of his remarks Thursday, Biden said that the G7 was united in its determination to halt Russia’s invasion of Ukraine. “We agreed to move forward on devastating packages of sanctions and other economic measures to hold Russia to account,” Biden said in that statement.
Biden’s latest sanctions package includes cutting off four of Russia’s largest banks from western financial markets, freezing the assets of many of the same institutions and Russia’s wealthiest oligarchs overseas, and halting exports of certain technologies to Russia from the West.
“The threat of the sanctions and imposing the sanctions and seeing the effect of the sanctions are two different things,” Biden said at one point, asked why the sanctions had not been implemented sooner. “It will so weaken his country that he’ll have to make a very, very difficult choice of whether to continue to move toward being a second-rate power.”
But the announcement was almost more notable for the provisions that it did not include as the ones it did. Biden did not announce that Russia would be barred from the SWIFT messaging system, which would cut it off from almost all international financial transactions, and Biden did not announce any new information about potential visa waivers for the millions of Ukrainians who are likely to become refugees amidst the occupation.
And while Biden did announce new sanctions and asset freezes for “Russian elites and their family members,” one elite individual remains safe at the moment: Putin himself. The Russian president is believed to have hoarded an enormous personal fortune through obscured stakes in Russian oil and natural gas corporations in the decades since he first took power, estimated in the tens or even hundreds of billions of dollars. On the Black Sea, not far from Ukrainian territory annexed by Russia in 2014, Putin is reportedly building a billion-dollar palace, complete with golden eagles and state security guarding the grounds.
While Biden left no question who was to blame for the punishment Russia would endure, calling him “the aggressor” who “chose this war,” he did not respond to questions about why he had not sanctioned Putin himself.
The announcement of the measures sent the Russian ruble into a freefall, and the price of oil into the stratosphere. But the aggressive sanctions may still not be enough to satisfy some of Biden’s critics in Congress, who have criticized the president’s resistance to implementing sanctions before a potential invasion of Ukraine, as the country’s president had requested for months.
“President Biden’s timid sanctions tonight are wholly unequal to this moment,” Sen. Tom Cotton of Arkansas said on Monday. “Russia is invading Ukraine now.”
At the time, the White House indicated that Tuesday’s sanctions were only the beginning of the measures that would be taken if Russia escalated its invasion of Ukraine. In a press briefing with reporters, Deputy National Security Adviser Daleep Singh called the first round of sanctions “only the sharp edge of the pain we can inflict.”
“No Russian financial institution is safe if the invasion proceeds,” Singh added.
Biden carefully acknowledged in his remarks that the economic sanctions on Russia would likely cause Americans to bear some of the cost. Gas prices, already high, are likely to skyrocket with the rising price of oil, and major stock indices were broadly down.
“I know this is hard and Americans are already hurting,” Biden said. “I will do everything in my power to lessen the pain American people are feeling at the gas pump. This is critical to me.”
But, Biden said, Putin’s aggression against a sovereign neighbor in the hopes of “rebuilding the Soviet Union” is too important to ignore.
“America stands up to bullies, and we stand up for freedom,” Biden said. “This is who we are.”
