Here’s A Sanction On Russia That Will Boomerang To Hurt The United States

The financial war between the U.S. and Russia is in full swing.

Readers know that Russia invaded Ukraine on February 24, 2022, and has conducted a horrific war using siege tactics on ten or more Ukrainian cities. The main battle for the capital of Kyiv is yet to come, but large-scale bombardments and attacks are underway in Kharkiv, Mykolaiv, Sumy, and Mariupol.

The cities of Kherson at the mouth of the Dnieper River and Zaporizhzhia, the site of a nuclear reactor, have already fallen to the Russians. The major Black Sea port of Odessa is next in the Russian’s sights.

Once those gains are consolidated, the attack on Kyiv from the north, east, and south will begin. The U.S. and NATO have not engaged any forces in Ukraine (and they won’t), but large weapons transfers have been undertaken including anti-tank rockets (javelins) and surface-to-air missiles (stingers).

Still, the war is not exclusively kinetic. There’s a global financial war going on in which the U.S. and EU are major participants along with Japan, the UK, and other allies. Sanctions imposed on Russia are the most extensive and damaging financial sanctions ever used. These include a freeze on assets of the Central Bank of Russia and shutting out the ten largest Russian banks from international payments systems.

Now, Russia has begun to retaliate in the sanctions war. As reported in this article, Russia has banned commodity exports to any nation that has sanctioned Russia. This is where the law of unintended consequences comes into play.

Over 65% of the processed neon gas used to power lasers that make semiconductors comes from Odessa. Between 35% and 50% of strategic metals such as titanium, and aluminum used in aircraft manufacture by Boeing and Airbus, come from Russia. Much of the grain that feeds the Middle East and Africa comes either from Ukraine or Russia.

Russia also exports metals used in battery production for EVs including lithium, cobalt, and nickel. The list goes on topped by oil, natural gas, and coal where Russia is the leading supplier to Europe.

If Russia follows through, we could be looking at a shutdown of major industries around the world from semiconductors (essential for automobiles, appliances, electronics, etc.) to heavy equipment and transportation. Russia may be the first victim of U.S. sanctions. But the entire world will pay the final price.

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