Politics

Biden vows wider sanctions on Russia in effort to cut Moscow off from the global economy

Key Points
  • Biden said Thursday that the U.S. will introduce a new wave of sanctions against Russia in a broad effort to isolate Moscow from the global economy.
  • The president said that the totality of the penalties will target trillions in assets and include restrictions against Russian banks including VTB Bank and Sberbank.
  • The White House has also authorized additional troops to be stationed in Germany as NATO allies look to bolster defenses in Europe, Biden said.
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President Biden addresses the Ukraine invasion

President Joe Biden said Thursday that the U.S. will introduce a new wave of sanctions against Russia in a broad effort to isolate Moscow from the global economy.

The president said that the totality of the penalties will target trillions in assets and include specific measures against Russian elites and banks including state-owned VTB Bank.

The White House has also authorized additional troops to be stationed in Germany as NATO allies look to bolster defenses in Europe, Biden said.

"Today, I'm authorizing additional strong sanctions, and new limitations on what can be exported to Russia," Biden said. "This is going to impose a severe cost on the Russian economy both immediately and over time."

"I just spoke with the G-7 leaders this morning," Biden said Thursday afternoon. "And we're in full and total agreement: We will limit Russia's ability to do business in dollars, euros, pounds, and yen to be part of the global economy. We'll limit their ability to do that."

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The Treasury Department released a more detailed list of the U.S. sanctions shortly after Biden's speech. The department said that its restrictions will drastically undercut the ability of Russian lending giant Sberbank and VTB Bank to operate.

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President Biden levies new sanctions on Russian assets after Putin begins Ukraine invasion

"On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars," Treasury said in a release. "The vast majority of those transactions will now be disrupted."

It also said it will target families close to Russian President Vladimir Putin to put pressure on Moscow to end its military assault. Individuals named in the list include Putin ally and former chief of staff of the Presidential Executive Office Sergei Ivanov and his son. Igor Sechin, another of Putin's closest allies and the CEO of Rosneft, one of the globe's largest publicly traded oil companies, is being targeted along with his son.

Prior to Biden remarks, leaders of the Group of Seven nations said they "are appalled by and condemn" Russia's military aggression in Ukraine and promised to impose "severe and coordinated economic and financial sanctions" against the Kremlin.

Like other world leaders, Biden said U.S. sanctions by the Commerce Department will also restrict high-tech trade with Moscow to limit its access to semiconductors needed to manufacture artificial intelligence, aerospace and defense hardware. The U.K. and Canada both announced crackdowns on exports to Russia earlier Thursday.

Biden said that if Russia conducts cyberattacks against U.S. companies or infrastructure, those actions would be met in kind.

But he reiterated that the U.S. would not send troops into Ukraine.

"Our forces are not and will not be engaged in the conflict with Russia in Ukraine. Our forces are not going to Europe to fight in Ukraine, but to defend our NATO allies," Biden said. We will "defend every inch of NATO territory with the full force of American power."

The economic penalties come as Russian troops advance through Ukraine after embarking on a large-scale offensive of its neighbor early Thursday local time.

Putin announced that Russia would launch a "special military operation" in Ukraine designed to check its military capacity and added that Moscow's plans do not include the occupation of Ukrainian territory.

"As a result of Putin's war of choice, Russia will face immediate and intense pressure on its economy, and massive costs from its isolation from the global financial system, global trade, and cutting-edge technology," the White House said in a news release.

The Biden administration noted Thursday that Russia's economy has already faced intense stress in recent weeks amid a swoon in the value of the ruble and that its stock market sank to its lowest level in over fours years.

"With these new stringent measures," the White House added, "these pressures will further accumulate and suppress Russia's economic growth, increase its borrowing costs, raise inflation, intensify capital outflows, and erode its industrial base."

The U.S. and its NATO allies say there has been little to no evidence of military aggression from Ukraine and that Russian claims to the contrary served as Moscow's pretext for invasion.

The military conflict in Ukraine and subsequent economic sanctions have kept global markets volatile for weeks and roiled traders again on Thursday. In Europe, the Stoxx 600 closed down more than 3% as bank stocks swooned more than 8%, while the German DAX index dropped 4%.

The U.S. S&P 500 traded about 0.2% higher.