New U.S. sanctions on Russia target banks, high-tech imports

WASHINGTON – The United States and Western allies stepped up economic sanctions on Russia following its escalated attack on Ukraine, President Joe Biden said at the White House on Thursday.

Biden had for weeks pledged to impose significant sanctions on Russia if President Vladimir Putin followed through on plans to invade Ukraine. As the invasion ramped up early Thursday morning and Russian forces shelled Ukraine, Biden also increased sanctions.

“Putin is the aggressor,” Biden said. “Putin chose this war. And now he and his country will bear the consequences.”

The sanctions mostly target Russia’s financial sector. The U.S. and allies will limit Russia’s ability to use international currency, including U.S. dollars, euros, pounds, and yen. The U.S. Treasury Department will freeze roughly $1 trillion in assets held by Russian banks. 

Biden also froze U.S. exports to Russia of products used for high-tech industries, part of an effort to degrade the Russian aerospace industry and military, he said.  

Meanwhile, Defense Secretary Lloyd Austin, at the direction of the president, authorized the deployment of 7,000 additional U.S. troops to Germany, according to a senior Defense official. 

The soldiers, who will leave in the next few days, are intended “to reassure NATO allies, deter Russian aggression, and be prepared to support a range of requirements in the region,” according to the official.  

Biden has said repeatedly that U.S. troops will not be deployed to Ukraine.

Global financial system

Russia will not be expelled from the global financial system known as SWIFT – a move some thought possible – because European allies did not support that plan, Biden said.

Other sanctions on Russia financial institutions were stronger than a removal from SWIFT, Biden said.

Assets from the four largest Russian banks that touch the U.S. financial system would be frozen, he said. Individual members of Russia’s elite class would also be sanctioned, with their U.S. assets frozen, Biden said.

Treasury also announced sanctions on the Belarusian defense sector and financial institutions. Belarus is a close ally of Russia and part of the invasion of Ukraine came across the Belarusian border.

Biden estimated sanctions from the U.S. and allies would halt roughly half of Russia’s high-tech imports.

“It will strike a blow to their ability to continue to modernize their military,” he said. “It’ll degrade their aerospace industry, including their space program. It will hurt their ability to build ships, reducing their ability to compete economically. And it will be a major hit to Putin’s long-term strategic ambitions.” 

Biden insisted that sanctions could be effective in curbing Russian aggression, despite the threat of earlier sanctions seemingly doing little to deter Putin.

“This is going to take time,” he said. Putin is “now going to see the effect of the sanctions. … It will so weaken his country that he’ll have to make a very, very difficult choice.” 

Republicans react

Senate Minority Leader Mitch McConnell said in a statement that Congress should impose “truly devastating sanctions against the Kremlin and its enablers.”

The Kentucky Republican then called on the United States and the 29 other nations within the North Atlantic Treaty Organization to “redouble our material support for Ukraine’s resistance” and “invest in the capabilities needed for long-term military competition with Russia and China.”

McConnell said the government funding package Congress is on track to pass before March 11 “will provide an opportunity to lead by example.”

Thursday’s sanctions package was tailored to allow energy payments to continue, Biden said, adding that they were targeted “to maximize a long-term impact on Russia and to minimize impact in the United States and our allies.”

Biden, whose approval rating has suffered during a period of economic inflation at home, said he was sensitive to the costs, including spiking gas prices, to the American public of the “complete rupture” of the U.S.-Russia relationship.

“I will do everything in my power to limit the pain the American people are feeling at the gas pump,” he said. “But this aggression cannot go unanswered.”

Biden took questions from reporters, but declined to answer why he hadn’t personally sanctioned Putin. He also declined to comment on U.S.-China conversations about the conflict.

Biden also said he would move to strengthen NATO allies near Ukraine and would authorize force if the conflict spilled into those countries.

In addition to the forces deploying to Germany, Biden earlier this week ordered U.S. troops already stationed in Europe to the eastern edge of NATO territory in Estonia, Latvia, Lithuania, Poland, and Romania.

“If he did move into NATO countries, we will be involved,” Biden said.