Janet Yellen, the current treasury secretary of the United States, has been noted for her diplomatic approach in dealing with tensions with Beijing. She has been described as a twinkly eyed professor, rather than a foreign-policy hawk, which may help in fostering a more constructive relationship with China. During a recent trip to China that concluded on April 9th, Yellen made a point to highlight the improved state of Sino-American relations compared to a year ago, indicating that the two countries are on a “stronger footing”.
However, Yellen’s visit was not solely for diplomatic pleasantries. She also delivered a warning to Chinese banks regarding their involvement in facilitating the transfer of military or dual-use goods to Russia’s defence-industrial base. Yellen emphasized that any banks found engaging in such activities could face the risk of US sanctions. This warning from Yellen represents a significant escalation in America’s financial conflict with Russia, particularly following Vladimir Putin’s invasion of Ukraine in February 2022.
In response to Russia’s aggression, the United States has implemented sanctions on nearly 3,600 Russian entities, as reported by Castellum.AI, a compliance firm. European allies have also imposed extensive sanctions on Russia, including freezing central-bank reserves and banning the export of military equipment. Additionally, SWIFT, a crucial messaging service used by thousands of banks worldwide, has restricted some of Russia’s largest banks from accessing its services. Despite these measures, Russia has continued to be resilient in the face of sanctions, maintaining its military capabilities and preparing for further escalation.
The ongoing financial conflict between the United States and Russia has raised concerns about the effectiveness of sanctions as a means of influencing Russia’s behavior. While sanctions have undoubtedly caused economic strain for Russia, they have not deterred Putin’s aggressive actions in Ukraine. The ability of Russia to circumvent sanctions and maintain its military capabilities demonstrates the limitations of financial measures alone in deterring a determined adversary.
As tensions continue to escalate between Russia and the West, the role of diplomacy and economic pressure in shaping geopolitical outcomes becomes increasingly important. Janet Yellen’s approach of combining diplomatic engagement with financial warnings to China underscores the complex and multifaceted nature of modern international relations. The evolving dynamics of the US-China-Russia triangle highlight the need for strategic thinking and nuanced policies to navigate a rapidly changing global landscape.
In conclusion, Janet Yellen’s recent visit to China and her warning to Chinese banks regarding the risks of supporting Russia’s defence industry represent a significant development in America’s financial conflict with Russia. As the situation in Ukraine remains volatile and unpredictable, the effectiveness of sanctions as a tool of coercion is being questioned. The interplay between diplomacy, economic pressure, and military deterrence underscores the complexity of contemporary international relations. It is imperative for policymakers to adopt a holistic approach that considers both the short-term consequences and long-term implications of their actions in addressing global security challenges.
