Why do Russian products keep arriving in the United States after 6 months of war and sanctions?

On a hot, humid summer day on the east coast of the United States, a huge container ship entered the port of Baltimore loaded with plywood sheets, aluminum rods and radioactive material, all sourced from Russian fields, forests and factories.

US President Joe Biden promised to “inflict pain” and deal “a crushing blow”‘to his Russian counterpart, Vladimir Putin, through trade restrictions on products like vodka, diamonds and gasoline after Russia invaded Ukraine six months ago.

But hundreds of unsanctioned goods valued in billions of dollars, including those traveling on the ship that arrived in Baltimore from St. Petersburg, continue to arrive in US ports.

The Associated Press found out over 3,600 shipments of wood, metals, rubber and other Russian productsThey have arrived in US ports since Moscow began launching missiles and air strikes on its neighbor on February 24.

This is a significant drop compared to the same period in 2021, when shipments were nearly 6,000, but adds more than $ 1,000 million in trade per month.

The impact

In fact, none of those involved really expected the trade to stop after the invasion. A ban on the import of certain items would have done more damage to affected sectors in the United States than in Russia.

“When we impose sanctions, they can disrupt world trade. So our job is to think which penalties have the greatest impact and, at the same time, allow global trade to continue, “Ambassador Jim O’Brien, director of the State Department Sanctions Coordination Office, told the AP.

Experts say the global economy is so interconnected sanctions should be limited in scope to avoid rising prices in an already unstable market.

Furthermore, US sanctions do not exist in a vacuum: bans enacted by the European Union and Great Britain create complicated trade rules that can confuse buyers, sellers and politicians.

For example, the Biden administration and the EU have published separate lists of Russian companies that cannot receive exports, but at least one of them – which supplies the Russian military with the metal used to build the fighter jets that drop bombs on. Ukraine – continues to sell millions of dollars worth of metal to American companies and European, he discovered the AP.

Products

While some US importers look elsewhere for alternative materials, others say they have no choice. In the case of wood, of the dense forests of Russian birch trees it turns out a product that is so tough and durable that most school furniture and home floors in the United States are built with it.

Almost every day, the country’s ports receive containers with Russian items such as weight lifting shoescryptocurrency mining equipment and even pillows.

The breakdown of products imported from Russia shows that some are clearly legal and recommended by the Biden administration, such as the more than 100 fertilizer shipments that have arrived since the invasion.

Products now banned, such as oil and gas, continued to arrive long after the sanctions were announced for periods of “grace”.which allow companies to comply with existing contracts.

In some cases, the origin of what leaves Russian ports can be difficult to trace. American energy companies continue to import oil from Kazakhstan via Russia, even though that crude oil is sometimes mixed with Russian.

Trade experts warn it Russian suppliers are unreliable and the opaque corporate structure of most of the country’s large corporations makes it difficult to determine whether they have links to the Kremlin.

“This is a general rule: when there are sanctions, there are all kinds of opaque plots and illicit trade” said Russian economist Konstantin Sonin, who teaches at the University of Chicago. “However, the penalties make sense because while 100% of the revenue cannot be reversed, they can be reduced.”

Many US companies are choosing to stop trading with Russia. Coors Beer, for example, returned a shipment of hops from a Russian state-owned company in May as part of a commitment to suspend all business with the country, according to Molson Coors Beverage Co. spokesperson Jennifer Martinez.

Moscow and Washington have never been great trading partners and, therefore, import sanctions are a very small part of the retaliation strategy.

US export restrictions, especially technology, cause further damage to the Russian economy and sanctions on the Russian Central Bank they froze Moscow’s access to some $ 600 billion in the foreign exchange reserves of the United States and Europe.

Yet sanctions carry symbolic weight beyond the financial damage they can cause, especially to war-horrified American consumers.

AP Agency

PB