Business News

US companies get hurt by sanctions targeting Russia

Adam Shell

The economic sanctions the United States imposed on Russia over the Ukraine crisis don't hurt only the Russian economy. They hurt some U.S. companies that do business in Russia, too.

John Deere, which makes heavy farm equipment and has two factories in Russia, was the latest company to blame weaker sales on economic sanctions. Despite beating its fiscal second-quarter earnings by 16 cents, the company best-known for its green and yellow tractors, cut its full-year outlook, saying sales of its tractors and harvesters would fall "significantly" in Ukraine, Russia and other ex-Soviet republics. The company cited credit restrictions by its customers there for the weak outlook.

An employee tightens the bolts on the wheel of a Deere & Co. John Deere W540 combine harvester inside the company's Domodedovo Manufacturing Center near Moscow, Russia
Andrey Rudakov | Bloomberg | Getty Images

Shares of John Deere were down 2.2% to $91.58.

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The United States and European Union are trying to pressure Russia into dialing back its involvement in the political affairs of Ukraine by imposing economic sanctions that target banks and dozens of officials.

Read More Russia targets space station in retaliation for sanctions

U.S. companies view Russia as a "growth" market, and they do about $40 billion worth of business annually with Russia.

US Ambassador to Ukraine: Russia, more sanctions, global markets

After Russia's annexation of Crimea, McDonald's closed three of its fast-food outlets there. The company said it had to cut evening hours in some stores in the region because of less foot traffic. The hamburger giant has more than 400 stores in Russia and gets roughly 9% of its revenue there.

Read More US diplomat says actions against Russia 'starting to bite'

DuPont, which has a big agriculture business, said its customers in Ukraine are deferring or reducing seed purchases because of difficulties in obtaining credit. Visa and MasterCard also feel the pain as sanctions levied against a handful of Russian banks forced them to stop servicing those banks. Bank customers that hold Visa or MasterCard credit cards can't use them to make purchases.

—By Adam Shell of USA Today