There is much more the U.S. could do on the sanction front to penalize Russia for its war on Ukraine, points out Goldman Sachs Chief Economist Jan Hatzius.
"The prospects for additional sanctions depend mainly on how the war in Ukraine unfolds, but at this point further escalation of sanctions seems likely," Hatzius said in a new note to clients.
The closely followed Hatzius laid out five additional actions the U.S. may take:
Block more Russian individuals and related companies.
Block additional banks or restrict their ability to clear dollar transactions.
Eliminate exceptions to sanctions for energy transactions.
Ban imports of Russian energy.
Raise tariffs on imports from Russia.
Measures by the U.S. and Europe, including a move to block some Russian banks from the SWIFT payment network and sanctions on the Central Bank of Russia, have already sent the ruble cratering and kept the Moscow Stock Exchange closed.
To add to the economic blowback, corporate America and a growing number of multinational companies have joined in protest of Moscow’s military attack on Ukraine, moving to sever business dealings with Russia or take a stand in support for Ukrainian refugees.
In the past day alone, IBM said it has ceased operations in Russia. Consumer products giant P&G will curtail operations to a minimum of selling Russians basic necessities. Jeans maker Levi's has suspended operations in Russia.
"In 2021, approximately 4% of the company’s total net revenues were derived from Eastern Europe, half of which was related to Russia. But any business considerations are clearly secondary to the human suffering experienced by so many," Levi's said in a statement.
Hatzius adds the U.S. should work closer with allies to make the sanctions on Russia truly hurt.
"The sanctions that the U.S. imposes would be more impactful if the U.S. (and potentially allies) enforce them through secondary sanctions on firms in countries that have not themselves imposed sanctions. In particular, a ban on Russian oil would only be effective if other countries do not absorb excess Russian exports. To prevent this, the U.S., likely along with the EU, could impose penalties on firms in non-sanctioning countries if they buy Russian oil," Hatzius says.
The White House is reportedly planning to ban imports of Russian oil, an announcement on such a ban could come as soon as Tuesday.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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