Trade Sanctions Hurt Those Who Impose It Too

As we all know, US and EU leaders, are very angry at Russia right now, because Russia has done in Ukraine/Crimea what they themselves did in Serbia/Kosovo, namely intervene militarily to force a smaller state to allow a region that wants to secede to secede. How dare Russia do as we do, only we can militarily intervene in other countries!

But what can they do about it?

Start a war with Russia? That would be very foolish given Russia’s impressive military might, and fortunately US and EU leaders seems to realize that.

The second most powerful option would be trade sanctions. The problem with that is that this would hurt the US and EU too. Trade between the US and Russia is relatively small so sanctions wouldn’t be very costly for the US-but then again it wouldn’t be very costly for Russia either.

Sanctions stopping or severely limiting trade between the EU and Russia would hurt Russia badly, particularly in the short run before Russia have had time to find other buyers of its energy products, but it would also hurt the EU badly. No Russian oil or gas would cause huge power shortages and energy price increases in many EU countries, and if Russia stops buying EU products it would break the weak and fragile European recovery.

Are EU leaders really willing to wreck their economy in a situation where the debt problems aren’t solved just to punish Russia for siding with the people of Crimea? Hopefully and probably not.

Instead they will probably and hopefully just continue using “harsh language” against Russia and do a few symbolic measures, like kicking Russia out of G8 and have some targeted sanctions against Russian leaders

 

 

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3 Comments

  1. In what sense is Serbia a smaller state? And military intervention by NATO happened in 98, so 10 years before Kosovo declared independence. Also, in the nineties Milosevic was the Serbian president who had wanted to create Big Serbia. Not someone you could really negotiate with.

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