U.S. To Sanction China If They Help Russia. Another Failed Threat From Biden.

The first round of financial targets included obvious attacks such as freezing the U.S. dollar accounts of Russian banks and oligarchs. The second round raised the ante by freezing the dollar accounts of the Central Bank of Russia itself. This was unprecedented except in the case of rouge states such as Iran, North Korea, and Syria.

Suddenly, the central bank of the world’s ninth-largest economy and third-largest oil producer with over $2.1 trillion in GDP found itself shut out of the global payments and banking systems. The sanctions went beyond finance and banking to include bans on Russian exports, freezing Russia out of insurance markets (as a way to effectively prohibit oil shipments), and bans on critical exports to Russia, including high-tech equipment, semiconductors, and popular consumer goods.

Major U.S. and other Western companies, from Shell Oil to McDonald’s, were pressured to shut down operations in Russia, and many did. Still, all of these actions are what are known as primary boycotts. That means the designated enemy (in this case, Russia) is the direct target of the sanctions.

Now, in keeping with a dangerous pattern of escalation, the U.S. is considering secondary boycotts. This is where the sanctions target is not the enemy but is doing business with the enemy in ways the U.S. does not approve of. One of the highest-profile secondary boycott targets is China, as reported in this article.

China is considering providing military aid to Russia, including drones, which have proven highly effective on the battlefield. The U.S. has warned China that if it provides such aid to Russia, it will face “serious consequences” and that the U.S. will impose “real costs” on China.

It’s not clear how effective U.S. sanctions on China will be considering that Russia and China have cooperated closely in recent years and that China is actively decoupling its economy from the U.S. economy (and vice versa) in any case. More likely, secondary sanctions imposed on China will simply drive Russia and China closer together and marginalize the U.S. even more.

Escalation on the military front is highly dangerous and could provoke a nuclear war. Escalation on the financial and economic fronts is equally dangerous and could contribute to a global recession. U.S. policymakers seem to be too dumb and too shortsighted to consider either prospect.

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