Russia’s 2014 annexation of Crimea, its war in eastern Ukraine, its interference in the 2016 U.S. presidential election, and other aggressive acts against the United States and its allies demand a strong Western response. For the past four years, that response has been dominated by sanctions and other coercive economic measures. U.S. and European officials have hoped that the economic measures would not only exact a cost for such actions but also deter the Kremlin from escalating its assault on American and European interests.
The economic pressure has certainly had an effect. The IMF estimated that the sanctions linked to the 2014 invasion of Ukraine cost Russia 1 to 1.5 percent of its GDP by mid-2015. The sanctions also hurt the Russian treasury’s bottom line, since Russia had to make up for lost Western capital by spending billions of dollars to prop up large companies that depended on Western funds. The more recent sanctions announced in April 2018 in response to Russia’s interference in the U.S. election rattled Russian financial markets and put pressure on the value of the ruble. Specific people and companies have also felt the squeeze: the net worth of Oleg Deripaska, the pro-Putin oligarch, for example, has tumbled because of U.S. sanctions.
And yet sanctions have done little to change Moscow’s ways. Not only has Russia refused to make concessions on its military intervention in Ukraine but, in November 2018, it seized three Ukrainian naval ships transiting the Kerch Strait. According to a recent report by U.S. Director of National Intelligence Dan Coats, sanctions did not stop Russia from interfering in the U.S. midterm elections in 2018, and, indeed, Coats said that China and Iran tried to interfere as well. Nor have they dissuaded Moscow from abetting North Korea’s efforts to bypass international sanctions, propping up Syrian President Bashar al-Assad, or using a military-grade nerve agent in the Salisbury attack on Sergei Skripal, a Russian exile living in the United Kingdom.
The United States
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