This post was updated on Feb. 22.
The US and its allies are expected to announce new economic sanctions against Russia on Feb. 22, after Russian president Vladimir Putin said he would send “peacekeeping” troops into Ukraine in support of separatists in two regions of the country. The sanctions are likely to target Russia’s major banks. It’s a risky gambit to take against a country whose exports of fossil fuels, metals, wheat, and other key commodities are crucial to many global supply chains; Russia produces 43% of the world’s palladium, for example, a metal crucial for car engines.
Even without targeting those industrial sectors directly, analysts fear, financial sanctions would likely dampen exports at a time when supplies for most commodities are already constrained, inflation is rising, and prices are already high. Prices for several of Russia’s most important exports are already much higher than they were before the pandemic.
The more Russia presses into Ukraine, the more economic pain will be shared widely beyond Russia’s borders.