Latest News by Industry
WASHINGTON (AP) — American and allied sanctions and export controls are constraining Russia’s ability to wage war on Ukraine by degrading its military, a top Treasury Department official said Tuesday, adding that more sanctions will be imposed on the Kremlin in the coming days.
Treasury Deputy Secretary Wally Adeyemo said at the Council on Foreign Relations in Washington that as the war on Ukraine nears the one-year mark, U.S. sanctions are effectively resulting in military losses for Russia by straining its military machine.
Russia is the world’s second-largest arms producer after the United States, but Adeyemo asserted that “today, Russia can’t produce enough arms to meet their basic needs and to be a supplier to the countries that rely on them.”
The financial penalties imposed by the U.S. and its allies “have degraded Russia’s ability to replace more than 9,000 pieces of military equipment lost since the start of the war,” he said, adding, “Russia has also lost up to 50% of its tanks.”
More than 30 countries, including the U.S., the EU nations, the United Kingdom, Canada, Australia, Japan and others — representing more than half the world’s economy — have imposed price caps on Russian oil and diesel, instituted export controls, frozen Russian Central Bank funds and restricted access to SWIFT, the dominant system for global financial transactions.
Adeyemo said the U.S. plans to announce additional sanctions on Russia this week targeting its military manufacturing industry. President Joe Biden reiterated the need for additional sanctions in a speech Tuesday in Poland.
“Our view is that it is a sign of weakness, not strength, that Russia today is forced to rely on Iran and North Korea for their military arms, from countries that have already been cut off from the international financial system,” he said.
“While we have far more to do, we are succeeding in reversing the course of Russia’s budget and undercutting its military-industrial complex,” Adeyemo says.
As the invasion enters its second year, the U.S. will intensify its efforts to boost sanctions, Adeyemo said, including cracking down on sanctions evasion and putting economic pressure on countries and firms that continue to do business with Russia.
“The cost of doing business with Russia in violation of our policies is a steep one, and companies and financial institutions should not wait for their governments to make the decision for them,” he said.
He acknowledged recent reports that Russia's economy is performing better than expected. This year, its economy is projected to outperform the U.K.’s, growing 0.3%, while the U.K. faces a 0.6% contraction, according to the International Monetary Fund.
“While Russia’s economic data appears to be better than many expected early in the conflict," Adeyemo said, “our actions are forcing the Kremlin to use its limited resources to prop up their economy at a time where they would rather be investing every dollar in their war machine.”
“The Russian economy you see today is nothing like the Russian economy you saw before the invasion.”
___
Follow the AP's coverage of Russia's war in Ukraine at https://apnews.com/hub/russia-ukraine.