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New US Anti-Russia Sanctions Made to Head Off Senate-Proposed Sanctions – Expert

Sputnik – August 11, 2018

Russian Prime Minister Dmitry Medvedev said that the new sanctions the US plans to introduce might be treated as a declaration of economic war. Radio Sputnik discussed this in detail with independent political analyst Gilbert Doctorow.

Sputnik: What is your take on the statement made by the Russian prime minister? Can the sanctions lead to economic warfare between Moscow and Washington?

Gilbert Doctorow: There’s been a low-grade economic warfare going on for several years ever since the initial introduction of sanctions going back at least two years. The question is what is new here and we really don’t know. The markets reacted severely; the ruble fell drastically. Certain Russian shares like Aeroflot or Sberbank were beaten down five percent and more in the first reactions to the announcement of the United States. But the fact is that the real harm to the Russian economy is coming from the first sanctions. And for the greater sanctions scheduled three months after the introduction, after Russia has proven it is unable to take responsibility for the Skripal poisoning and face the consequences; we may assume that Russia will not admit to having taken part in something that it didn’t participate in. Both the initial sanctions and those that would come in place three months later have not been specified, so to speak about the severity of this particular action by the [US] administration is premature. Nonetheless, I do adhere to one interpretation of what is happening that makes some sense to me: namely, these new sanctions, with respect to the Skripal case, were introduced by the Trump administration to head off what had been described as draconian and genuinely nuclear button sanctions that members of the US Senate have intended to impose on Russia, from a bill introduced by (…) and those sanctions, which genuinely take you to very limits of economic warfare at the level of hostility that very often is jumping off point to armed conflicts, those sanctions would be prevented or sidelined by the more modest sanctions that are announced by the administration. This is the interpretation that I pass on; I think it makes a lot of sense. The level of US-Russian trade has never been very high and that is one of the reasons why it has always been a cheap and easy thing for the American Congress to do – to impose sanctions or otherwise limit Russia’s commercial and foreign policy possibilities in the world by unilateral US action. That always has been very cheap for the United States because the whole volume of bilateral trade has been minimal. The commercial interests of the US and Russia have never been matched in a way that Russia’s interests are matched with the EU and, more recently, with China. If these new sanctions fell on Russia absent any other trade developments or other foreign policy initiatives by the United States’ third parties then one could get very excited about it, but considering that Donald Trump has begun a very bitter trade war with China, with which it has at least $500 billion in trade, possibly to be held ransom to new tariffs up to 25 percent, these sanctions that the United States is considering imposing on Russia such as suspending Aeroflot flights, which only would put Aeroflot in the same status with Delta, since at the moment Aeroflot is the only surviving supervisor of direct air links, or somehow affecting the situation with Sberbank. When you consider the dollar value of these sanctions, they are incredibly small compared to what the United States is doing with China and is threatening to do with the EU in the tariff war. Therefore, you have to put the Russian situation in this broad context of US economic aggression against the rest of the world.

Sputnik: What’s your take on the situation generally?Gilbert Doctorow: It will very much depend on the November mid-term elections in the United States. What we are seeing now from the point of Mr. Trump’s enemies in the Senate, both enemies within his own party and enemies, most obviously, in the Democratic Party, is a scrambling for positions that these respective politicians will place before the electorate for the November elections. If Donald Trump loses control of both Houses of Congress then he will be impeached. If he loses control of one House then we will see a continuing fight between the executive and the legislative over policy towards Russia. Russia is really a political football in the US for the partisans who are playing out their antagonisms and reaching out the electorate to take or to retain control of Congress. The thing to watch is what happens in November. The Russian economy has been preparing for this type of activity for some time and I think that the Russian economy is quite resilient or will find its footing very quickly when the particulars are announced. The Russians have held back, they have been very restrained. I think the thing to look at is at what moment will Russia pull the plug on its delivery of rocket engines to the United States. That is, perhaps, the single most important countermeasure that Russia has to respond to draconian sanctions from the US. If in the current round of Russian countermeasures we don’t see any mention of these rocket engines then you can assume that whatever Mr. Medvedev is saying publically, the Russian government is not taking as a serious threat the America administration’s posturing.

August 11, 2018 - Posted by | Economics | ,

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