In the days after the invasion of Ukraine, the White House assessed President Vladimir Putin would end the attack if the US froze over $300 billion owned by the Russian central bank. However, the Washington-led economic war on Moscow has failed to have a major impact on the Russian economy.
According to Bloomberg, in the immediate reaction to Russian forces invading Ukraine on February 24, 2022, the White House began to develop the "economic equivalent of a nuclear weapon" to use against Moscow. National Security Advisor Jake Sullivan led the team that designed the sanctions on Moscow’s economy and froze $300 billion in assets of the Russian central bank.
The Joe Biden administration believed the economic war inflicted "shock and awe" on the Russian economy. Bloomberg reported some American officials worried the actions would do too much damage to Russia.
So far, the Western economic war on Russia has failed to have its designed impact on Moscow’s economy. Despite predictions of a double-digit GDP contraction in 2022, the Russian economy held firm, with the rouble one of the top-performing currencies against the dollar.
Nicholas Mulder, a Cornell professor specializing in sanctions, says Washington has changed its strategy. "They’ve given up the expectation that this will change Russian decision-making." He continued, "Instead, they see it as an economic war of attrition."
Citizens in Western nations have felt the impacts of the economic war. Energy prices have skyrocketed in Europe. Meanwhile, Americans have struggled with decades-high inflation.
In recent years sanctions have become a favorite tool for policymakers in Washington. As foreign policy analyst Richard Hanania explains, "sanctions are used mostly because they give the impression that the American government is doing something between war and nothing."
The US has maintained extensive sanctions on North Korea, Cuba, Venezuela and Syria for decades. The embargoes have failed to change the governments of those countries, but international organizations point out that sanctions have caused citizens of those countries to suffer.
Alena Douhan, the UN Special Rapporteur on coercive measures, said, Social or humanitarian aid "very often can’t be supplied because of sanctions, despite existing exemptions."
She argued a country targeted by unilateral sanctions can "slide backward on the development scale." Douhan warned that "sanctions may be a major threat preventing targeted countries from achieving the universal Sustainable Development Goals that are meant to improve the lives of everyone."
Expert on US economic warfare, Daniel Larison, claims Washington has a credibility issue with its sanctions. "Our government has a real credibility problem in that our promises to lift sanctions and make other concessions are not believable." He continued, "This greatly complicates the ability of our negotiators to strike bargains with other governments to resolve outstanding disputes."
Still, the Biden administration is preparing to roll out another traunch of sanctions on Moscow in the coming days. The new sanctions will target Russian banks, the financial sector and the defense industry. The European Union is also planning a new round of sanctions and is considering using the $300 billion in frozen Russian assets to fund Ukraine’s reconstruction.
As the US has sanctioned an increasing number of countries – Iran, Venezuela, Nicaragua, Syria, Yemen, North Korea, Zimbabwe, China and Russia – institutions such as the Shanghai Cooperation Organization have grown to facilitate trade between blacklisted countries. "The relationship between countries that are sanctioned by the US, such as Iran, Russia or other countries, can overcome many problems and issues and make them stronger," Iran’s President Ebrahim Raisi said. "The Americans think whichever country they impose sanctions on, it will be stopped. Their perception is a wrong one."