In an effort to penalize Russia for the invasion into Ukraine, the United States and other allied countries have enacted sanctions on Russia’s economy. Sanctions are economic restrictions used as a non-violent option to influence global events, and are more easily enforceable across national borders.
In this case, sanctions included Western countries removing Russian banks from SWIFT, a system that banks use for cross-border payments. The U.S. also banned imports of Russian oil and gas, in addition to banning certain technology exports to Russia.
Some of the biggest U.S. companies have also banned all operations in Russia, including Coca-Cola, Google, and Disney. Sanctions imposed by the United States are especially impactful considering half of all international trade is done with U.S. dollars, and 90% of all currency trades involve U.S. currency. If these sanctions continue, projections estimate that Russia’s economy will shrink up to 15% by 2022.
With their economy tanking, gold has become a precious commodity in Russia. This has increased the price of gold worldwide, and the international stock market has also dropped following these sanctions. Here in the United States, the cost of gasoline has skyrocketed, as has the cost of grain and wheat. With Russia and Ukraine locked in conflict, both nations cannot supply the world with those resources they used to provide in the past.