The immediate sanctions coming into force are limited to banning exports of US electronics to Russia. But it’s what comes next that is perplexing. Washington is saying that if Russia does not give a “guarantee” on halting the future use of chemical weapons, and if Moscow does not allow international inspectors into its country to monitor alleged chemical weapons – then the second wave of sanctions will be applied within 90 days.
The subsequent round of sanctions include banning Russian state-owned airline, Aeroflot, from operating flights to the US. The impossibility of Russia meeting Washington’s absurd demands make the further application of sanctions inevitable.
A separate bill is passing through Congress which is planning to hit the Russian banking system, aimed at preventing international transactions.
Senators sponsoring that bill have labeled it “the sanctions bill from hell”. The title of the proposed legislation says it all: “Defending American Society From Russian Aggression Act”. Senators John McCain, Lindsey Graham, Robert Menendez and Ben Cardin, among other Russophobes who are pushing the bill, are explicit about the objective. They say the measures implemented will “crush the Kremlin”.
The chances are paltry that President Trump will use his executive power to block the forthcoming sanctions. The political climate in the US among the intelligence agencies, lawmakers and the mainstream media has become saturated with anti-Russian hysteria. The US is an oligarchy in throes of insanity beyond democratic accountable to its people.
Already this week’s announcement of more offensive economic incursions on Russia sent the Russian economy plummeting. The ruble, bonds and stocks all nosedived. This is an attack on Russia’s vital interests. An economic Barbarossa.
For Washington this seems to be open season for sanctions. It’s not just Russia and Iran on the receiving end. China, Canada, the European Union, Turkey, Venezuela, North Korea, among others, are also being battered with American economic warfare, either under the name of “sanctions” or indirectly using the rhetoric of “tariffs”.
From the conflict in Ukraine, to the alleged annexation of Crimea, to Moscow’s principled support for Syria being traduced as “supporting a dictator”, to alleged “meddling in US elections”, and much more, Russia has shown huge reserves of stoicism and self-discipline in tolerating what can only be called gratuitous American aggression.
The crazed American rulers are pushing the world to the brink by their belligerence. Washington has heretofore given notice that it is not interested in diplomacy, dialogue, or negotiation. It only has one mode of conduct – war, war, war.
Some of Wall Street’s biggest banks are warning investors to steer clear of Russian assets after the ruble’s worst week since the 2015 oil crash amid mounting risks of crippling sanctions from the U.S.
Both Republicans and Democrats in Congress have called for tough measures against Russia in the wake of last month’s summit between President Donald Trump and his counterpart Vladimir Putin. Still, the outlook for passage of the bill submitted last week remains uncertain, particularly since the U.S. Treasury warned that sanctioning sovereign debt could cause instability in global markets.
The U.S. is more likely to apply sanctions selectively to avoid “collateral damage” than to pass the bill in full. Pressure on Russia, however, is only likely to rise further in the near term, he said in a note.
Reduce holdings of Russian assets because the tail risk from potential sanctions is “just too large.” High foreign ownership of Russian sovereign debt means that sanctions would have a big impact on bond yields.
However, No decision can be taken on the bill until the House returns from summer recess next month, leaving a cloud of uncertainty over markets until then.