WASHINGTON—As the Biden administration and U.S. allies begin contentious talks with Moscow this week, Western officials are eyeing significant financial punishments and targeted technology sanctions if Russia sends troops across the Ukrainian border, while likely avoiding the broadest energy and bank sanctions, according to people familiar with the matter.
“There are two paths before us,” Secretary of State
Antony Blinken
said Sunday on CNN. “There’s a path of dialogue and diplomacy to try to resolve some of these differences and avoid a confrontation. The other path is confrontation and massive consequences for Russia if it renews its aggression on Ukraine.”
Should Mr. Putin send troops over the border, U.S. officials have considered measures to curb Russian energy exports or expel the country from the dollar-denominated international financial system, according to people familiar with the deliberations. But those measures risk raising energy prices for U.S. consumers already struggling with high inflation, as well as hurting European economies that have deeper trade and financial ties to Russia’s, officials and analysts say.
“A compelling economic pinch on Russia squeezes the West,” said Kevin Book, an energy analyst at ClearView Energy Partners LLC, who likens the scenario to a cartoon character standing on a tree limb and chopping it off the trunk.
So the U.S. is also looking at more targeted measures, including erecting export barriers to block international sales to Russia of products with a certain percentage of American content, as well as preventing Moscow from getting access to cutting-edge microchips used in everything from aircraft to consumer electronics, according to people familiar with the matter. Even though U.S. exports to Russia totaled just $4.9 billion in 2020, imposing the type of export controls used against Cuba and semiconductor restrictions used against China would exact an economic toll and hurt efforts to modernize the economy, they said.
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Mr. Blinken and other top U.S. and European officials haven’t publicly detailed the range of possible sanctions, in part from a reluctance to tip their hand to Russia.
High-level talks with Moscow began Sunday night, when Mr. Blinken’s deputy,
Wendy Sherman,
Russian Deputy Foreign Minister
Sergei Ryabkov,
and military officials on both sides met in Geneva, a State Department spokesman said. On Monday, those officials will meet again to discuss broad strategic security matters.
On Wednesday, Russian officials will sit down in Brussels for a rare meeting with officials from the North Atlantic Treaty Organization. The following day, senior officials from the Organization for Security and Cooperation in Europe, which includes Russia and a host of regional countries, will gather in Vienna to begin a broad conversation on European security, a senior State Department official said.
Moscow has mobilized more than 100,000 troops near its border with Ukraine, prompting fears Mr. Putin intends to invade territory he considers part of historic Russia or is generating a crisis to extract security concessions from NATO.
Mr. Putin, for his part, says he has the right to move troops around in Russian territory and has demanded that NATO rule out letting Ukraine join the bloc and sever military ties to Ukraine and other former Soviet countries.
But NATO and the U.S. have long insisted as a matter of principle that any country that wants to can join the alliance, and that countries are free to associate with any other countries they choose.
A breakthrough on Ukraine is unlikely, in part because the Biden administration has said it won’t discuss the country’s future without Kyiv at the table.
“If things go properly, almost nothing happens in Geneva, because Moscow is insisting on major concessions in Europe that we cannot possibly give,” said John Herbst, a former ambassador to Ukraine and to Uzbekistan.
An image taken from video and released by Russia’s defense ministry is said to show military drills in the Urals, near Orenburg, Russia. Photo: Associated Press President Biden has ruled out direct U.S. military involvement in Ukraine, but has said he would expand defensive military aid to Ukraine if Russia attacks. As the talks approach, the U.S. has ruled out cutting U.S. troop levels in Eastern and Central European nations. But the White House is prepared to codify formally that the U.S. has no intention of deploying missiles on Ukrainian territory that could strike within Russia, if Moscow will make a reciprocal commitment. The Biden administration is also open to exploring limits or a potential ban on the deployment of intermediate-range land-based missiles in Europe. The Trump administration had rebuffed Russian proposals to discuss a moratorium on such missile deployments, saying that it could tie the U.S. hands without leading to the elimination of Russia’s 9M729 cruise missiles. The Russian development of those cruise missiles prompted U.S. accusations that Moscow was cheating on the 1987 Intermediate-range Nuclear Forces Treaty, and the Trump administration’s decision to withdraw from the accord. Russia has denied the allegation. The U.S. is also willing to discuss reciprocal reductions in military exercises in Europe, the senior administration official said, including bomber flights. Russia has cited U.S. and NATO military exercises across Europe as a “red line,” particularly in Ukraine, which Mr. Putin has said pose a threat on his nation’s doorstep. The U.S. says Russia’s exercises are bigger and more provocative.
Russian Deputy Foreign Minister Sergei Ryabkov is leading Russia’s side of the talks with U.S. officials in Geneva. Photo: Gavriil Grigorov/Zuma Press In terms of sanctions and nonmilitary measures to punish Russia in the event of an invasion, senior State Department officials said talks with partner countries are ongoing but that the measures would be an order of magnitude greater than previous sanctions. After meeting with Mr. Blinken in Washington on Thursday, German Foreign Minister Annalena Baerbock said sanctions would involve the financial sector. She declined to say whether Germany would cut off future gas imports from Russia through the new Nord Stream 2 pipeline, which Mr. Blinken has described as “leverage for Europe to use against Russia.” Moscow supplies almost half of the EU’s natural-gas imports and a quarter of its external oil supplies, according to Eurostat, the bloc’s statistical body. That leaves little room to make up for a potential loss of Russian energy exports. “The biggest deterrent sanctions we can impose on the Russian government is to sanction their oil-and-gas sector,” said Evelyn Farkas, an Eastern Europe expert who served as deputy assistant secretary of defense during the Obama administration. “Even that’s not a credible threat unless we work really hard—as we did in the context of Iran—to help allies and partners come up with alternative sources of fuel.”
German Foreign Minister Annalena Baerbock and U.S. Secretary of State Antony Blinken addressed a joint news conference last week in Washington. Photo: Kay Nietfeld /Zuma Press Energy Department analysts have told administration leaders that the market effects of sanctions are likely to be limited, with oversupply weighing on prices early this year. But other administration officials are skeptical, arguing oil-and-gas markets are tight and any U.S. effort to hurt Russian exports could cause a sustained price shock. Some senior Biden administration officials have weighed stringent sanctions on Russia including disconnecting Moscow from the SWIFT international banking system and preventing Russian institutions from using the U.S. dollar. Such an extreme option, typically reserved for pariah states, would affect Wall Street debt markets and hurt European banks that do business in Russia, so Mr. Biden and European leaders are unlikely to go that far, current and former officials say. “SWIFT would be hard even if they seize Kyiv,” said Mr. Herbst, the former ambassador. Write to William Mauldin at william.mauldin@wsj.com, Michael R. Gordon at michael.gordon@wsj.com and Timothy Puko at tim.puko@wsj.com Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8 Source link