Putin’s War – The United States & the World Responds – Part I

Early in the morning of February 24, Russian President Vladimir Putin sent his army across the Ukraine border. The attack on a sovereign nation was the first large-scale military invasion of a European country since World War II. Not only did it send millions of Ukrainian refugees into Poland and other neighboring countries, but it also sent political and economic shockwaves around the world.

Much has already been written about the political reasons for this war and its unfortunate humanitarian crisis. However, the purpose of this three-part blog series will not focus on those issues. Instead, we will explore the response of the United States and its allies and how that response will impact domestic and foreign business and economic activity in the short and long term.

Sanctions, Not Soldiers

Immediately after the invasion began, the United States and its allies announced sweeping economic sanctions against Russia and its political, military, and economic leaders. As the war dragged on, those sanctions intensified. Although Ukraine called for direct military aid, the United States and European countries have not been willing to risk open conflict with one of the world’s top nuclear powers. In fact, in his first speech after the war began, President Biden vowed the United States would not send any military personnel into action against Russia. Instead, the sanctions were designed to cripple the Russian economy and its long-term capacity to wage war.   These sanctions are also designed to create an internal backlash against the conflict among the Russian people, and to prevent Putin from engaging in destabilizing activities in other parts of the world (Kiplinger).

The United States and its allies did not stop with economic sanctions. Other tactics have included:

  • Winning the information war ,specifically by releasing intelligence about Russia’s plans before they could put them in action.
  • Supporting Ukraine’s information and communication infrastructure by sending supplies and expertise to help Ukraine, its military, and its people stay in communication.
  • Sending weapons, equipment, and money to Ukraine.
  • Canceling the operating license for the Nord Stream 2 pipeline to prevent Russia from exporting natural gas to Europe

Sanctions and the Private Sector

While the government imposes sanctions, it needs help from the private sector to carry them out. Immediately after the conflict began, many large U.S. corporations ceased operations in Russia. Companies like Visa, MasterCard, Apple, and Google terminated their payment services, making it difficult or impossible for Russians to electronically pay for goods and services. Meanwhile, western allies removed Russia from SWIFT, the mechanism that allows banks to transfer money across borders, which further isolated Russia economically.

Government and large corporations should not be the only ones implementing sanctions. Small businesses should also avoid doing business with any entity directly connected to Russia.  They can easily identify these by checking the U.S. sanctions list.  Sanctions do not only apply to physical products and services. Allowing Russian actors or companies to download software, data, or other digital assets could also be seen as a violation, with stiff penalties attached (CNBC).