Russia Sanctions – Biden’s Doomed Economic War on Putin

President Joe Biden threatened crippling economic sanctions if Russia invaded Ukraine. Then Russia invaded Ukraine. The administration imposed a spate of economic sanctions in response – but Russia continued its invasion and subsequent war against Ukraine. Though the Kremlin initially had a bit of a hiccup in its Gross Domestic Product (GDP) when the European Union (EU) and the US imposed economic sanctions, Moscow found workarounds with the help of China, Iran, North Korea, and other allies. Russia's GDP has rebounded. Why, then, does the president think a fresh new round of sanctions will fare any better?

Biden's Sanctions Are Not Strategy-Driven

Like so much of Biden's approach to the Ukraine crisis, there is no guiding strategy for the financial pressure. Sanctions have been applied incrementally with no specific objective other than the hope that economic pain will make Russian President Vladimir Putin and his cadre of oligarchs see the error of their ways and stop waging war against Ukraine. That hope faded quickly. In a recent Politico report, the failure of Biden's sanctions is painfully evident. Politico explained:

"[T]wo years on, Russia's economy has rebounded. Its factories are humming, its oil and gas sales are relatively strong, and its people are at work in a system retrofitted to be all about the war. Vladimir Putin, meanwhile, appears firmly in charge of the Kremlin, despite hopes that Russia's elite would turn on him as the economic pressure grew."

Not deterred by his sanctions failing to achieve the desired impact, Biden has issued hundreds more. "I am announcing more than 500 new sanctions against Russia for its ongoing war of conquest on Ukraine and for the death of Aleksey Navalny, who was a courageous anti-corruption activist and Putin's fiercest opposition leader," President Joe Biden announced in a White House press statement on February 24. "We are also imposing new export restrictions on nearly 100 entities for providing backdoor support for Russia's war machine," the statement reads. After more than two years of sacrifice, Ukrainian defenders "continue to fight with tremendous courage," as Biden put it. The truth is the current US national security team didn't put all the sanctions it had at its disposal into the fight.

The equivalent of 600 sanctions could have been implemented before against Putin to impede his war machine but weren't. Using the death of the Russian dissident Aleksey Navalny as the motivation for the new round of sanctions seems more geopolitical theater than a move by the US to make a substantive difference in Moscow's behavior. Those familiar with how Biden's White House staff sees the world are skeptical that the new economic limitation on the Kremlin will matter much.

"Analysts also express doubt that the latest round will have much impact. Critics of the US sanctions policy say it is another utilitarian step that only creates an illusion of decisive US actions as Ukraine's defenses are crumbling against Moscow's invasion," Ian Talley and Vivian Salama wrote for The Wall Street Journal. Additionally, the Biden administration has a habit of not having a coordinated or integrated approach to its attempt to clamp down on Russia's ability to continue its war on Ukraine.

For all its crowing about putting Russia in an economic vice, the US has not prevented Russia from profiting from continuing to sell refined petroleum products to the EU. "An EU sanctions loophole that allows imports of Russian crude if it's refined elsewhere made Russia an estimated $1.2 billion from sales of fuels in the European Union last year," OilPrice.com reported recently.

Russia Can Work Around Economic Penalties

The Biden administration may think it's tightening the economic screws on Russia to reduce its warfighting capability, but the evidence doesn’t back that up. Instead, Putin's close relationship with China's President Xi has enabled the Kremlin to maintain a profitable trade relationship around the world.

Russia's alliances with Iran and North Korea have kept the flow of ballistic missiles, drones, and artillery ammunition flowing. Furthermore, reports from inside Russia indicate Putin has put his country on a wartime weapons production footing, contributing to a positive, if not increasing, GDP.

The latest economic indicator as of September 2023, reported by Trading Economics, is that the Russian GDP Annual Growth Rate was 5.5%, compared with the US GDP at 3.3% as of December 2023. To paraphrase Inigo Montoya from the movie The Princess Bride, "President Biden, you keep using that word 'sanctions.' I do not think it means what you think it means." Biden's warfare by trade bans and penalties against Russia has not worked. Economic sanctions have not impeded the war on Ukraine – and there is little evidence they ever will.

The views expressed are those of the author and not of any other affiliation.