Joe Biden set to unveil ‘substantial’ new G7-backed sanctions aimed at Russia’s war in Ukraine

Hundreds of entities in Asia, Europe and Middle East targeted, as well as Moscow’s ‘future energy and extractive technical capabilities’
Biden administration has said no evidence China giving military support, but surge in its energy exports has helped Russian economy

US-China relations

Robert Delaneyin Washington

Published: 4:00am, 19 May 2023

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US President Joe Biden plans to unveil a “substantial” set of new sanctions targeting hundreds of entities in Asia, Europe and the Middle East as part of a renewed push to cripple Moscow’s ability to continue its war against Ukraine.

Measures to be announced while Biden is attending the Group of 7 summit in Hiroshima, Japan, include new US sanctions against 70 companies deemed to be helping Russia circumvent measures enacted by the G7 soon after the war started, a senior White House official told reporters on Thursday.

“All G7 members are preparing to implement new sanctions and export controls,” the official said. “I won’t get into the specifics of what partners are doing, but the United States will be rolling out a substantial package of our own.”

New US measures include “upwards of 300 … sanctions against individuals, entities, vessels and aircraft” that help Russia skirt measures like the blocking of Russian banks from the Swift financial messaging system, he said, adding that the latest moves would also target the country’s “future energy and extractive technical capabilities”.

Biden administration officials have said repeatedly in recent months that they see no evidence that Beijing is providing Russia with weapons or any other lethal military aid supporting the war in Ukraine, although a surge in Russian energy exports to China has helped boost the country’s economy.

According to Chinese customs figures, overall trade between China and Russia rose by 29.3 per cent to US$190.3 billion last year, up from US$147 billion in 2021. Imports from Russia increased by 43.4 per cent, while Chinese exports went up by 12.8 per cent.

While the official declined to identify specific entities targeted in the coming sanctions, China has stood out since the war in Ukraine started for its staunch defence of what it calls “normal trade relations” with its northern neighbour in the face of mounting Western pressure.

Underscoring this position, President Xi Jinping and his Russian counterpart Vladimir Putin shook hands in the Kremlin just weeks ago and issued joint statements lashing out at hegemony, unilateralism and protectionism – terms often used to describe the US.

Analysts have said the two leaders’ alignment exposes Chinese companies to further US action against them.

A renewed push by the US and its allies to cast a wider net in their efforts to undercut Russia’s ability to fight could help, according to Chris Miller, an associate professor of international history at Tufts University.

“G7 sanctions threats can only go so far to stop China from providing equipment to Russia’s military industries,” said Miller, author of Chip War: The Fight for the World’s Most Critical Technology.

“Bigger, more internationalised Chinese firms are afraid of sanctions, but smaller Chinese firms have been willing to take risks to trade with Russia.”

“Sanctions might be more impactful in deterring trade diversion via Turkey or countries in Central Asia,” he added.

“Some of these countries have seen substantial increases in their imports from Europe and exports to Russia, suggesting that Russia is finding ways to buy sanctioned goods from them.”

Turkey has resisted pressure from other Nato members to follow suit with most of the sanctions that the alliance has enacted against Russia. Over the past year Ankara has been warned by Washington about a jump in its exports to the country.

In a speech to bankers in Istanbul in February, Brian Nelson, the US Treasury Department’s top sanctions official, said that increase leaves Turkish entities “particularly vulnerable to reputational and sanctions risks” and possible lost access to G7 markets.

China’s envoy says Ukraine, Russia must ‘start with themselves’ to end war

Asked for specifics on what the G7 as a whole would say about China in its communique, the Biden administration official said to expect “a historic degree of unity across the G7 across a range of issues, but importantly, on the People’s Republic of China as well”.

The official added that “the types of principles that you’ve heard from a number of G7 leaders in recent months” illustrates that “we’re for de-risking, not decoupling”.

The communique would also reflect “the idea that we have an important need to invest in our own economic vitality as well as the security and resilience of our supply chains, that we have concerns around [China’s] non-market policies and practices, their efforts of economic coercion, [and] that we want to protect a narrow category of sensitive technology that can lead to military modernisation”.

Regardless of how the US sanctions, coordinated action or the communique end up looking as the meeting in Hiroshima wraps up, Beijing is likely to condemn them.

‘Little Nato’: will Biden’s G7 unity push create an ‘economic iron curtain’?

Chinese officials reiterated on Thursday their opposition to the communique produced after the G7 foreign ministers’ meeting in Karuizawa, Japan, in April, and warned against “building exclusive blocks” in the coming conference.

Invoking a term that Biden officials often use to describe China’s international investment and trade practices, Liu Pengyu, minister-counsellor at the country’s embassy in Washington, said in a media briefing on Thursday that he anticipated efforts amounting to “economic coercion” to be part of the outcome.

“Despite China’s solemn position, the communique issued after the G7 foreign ministers’ meeting interfered in China’s internal affairs,” he said, adding that “there were many accusations”.

“We think building exclusive blocks runs counter to the prevailing trend of inclusiveness and openness in international relations,” Liu said. “Economic coercion should not be supported.”