Biden administration divided on Russia sanctions: Bloomberg

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The Biden administration is divided on how far the United States can push sanctions against Russia without undermining its own economy and Western unity, Bloomberg reports.

According to the news agency, US President Joe Biden’s team has largely backed the sanctions plan that Washington put in place after Russia attacked Ukraine in late February. However, discussions on the issue have become more heated as sanctions have failed to convince Russian President Vladimir Putin to change course, Bloomberg reported on Wednesday, citing people familiar with the matter.

Biden team officials reportedly formed two factions. A group including State Department and White House officials would advocate an even more hawkish stance, arguing for the application of secondary sanctions.

They believe any opposition from US allies and partners can be overcome, according to Bloomberg.

Another group, largely represented by Treasury Department officials, reportedly raised concerns about the economic hardship such actions would cause, especially as Americans are already suffering from high oil prices and inflation. Some are also reportedly worried about the upcoming midterm elections in November and the Democrats’ chances of retaining their seats in Congress.

Bloomberg sources, however, called the ongoing discussions a “healthy internal debate,” saying there’s nothing unusual about the Treasury reviewing policies that could cause economic hardship.

The United States has suffered from record inflation and gas prices, which Biden has tried to blame on Putin, the conflict in Ukraine and the coronavirus pandemic.

According to the Pew Research Center, however, the annual rate of inflation hit 6.2%, the highest in more than three decades, as early as October 2021, long before Moscow’s attack on Ukraine.

At the same time, if Washington imposes more sanctions on Moscow, it could find itself alone in its efforts, as it could drive a wedge between the United States and its allies, Bloomberg said.

The US and UK previously imposed bans on Russian oil and gas, but at the time the EU did not follow suit. German Chancellor Olaf Scholz said in early March that he preferred to exert “sustainable” pressure on Moscow that would not be too burdensome for German consumers.

Last month, German Economy Minister Robert Habeck claimed that EU unity on sanctions against Russia was beginning to crumble.

“After Russia’s attack on Ukraine, we saw what can happen when Europe stays together. In view of tomorrow’s summit, let’s hope it continues like this. But it is already starting to crumble and crumble again,” he told a press conference in late May ahead of an EU sanctions meeting.

Although the EU was able to agree on a ban on Russian oil imports, it only did so after caving in to Hungary’s demands to exempt it from the application of sanctions so that it can continue to rely on the Druzhba pipeline.

Meanwhile, a Russian gas embargo is not even on the table, Austrian Chancellor Karl Nehammer said on Tuesday.

Russia attacked Ukraine in late February, after kyiv’s failure to implement the terms of the Minsk agreements, first signed in 2014, and Moscow’s eventual recognition of the Donbass republics of Donetsk and Luhansk . The protocols negotiated by Germany and France were designed to give breakaway regions a special status within the Ukrainian state.

The Kremlin has since demanded that Ukraine officially declare itself a neutral country that will never join the US-led NATO military bloc. kyiv insists the Russian offensive was unprovoked and has denied claims it planned to retake the two republics by force.

The attack sparked a heavy-handed response from the West, which imposed sweeping sanctions on Russia, freezing the assets of Russia’s Central Bank, targeting senior government officials and cutting economic ties.

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