The economic weapon and Russia in the 21st-century economy

White House states that it’s ready to reveal another economic weapon. If Vladimir Putin goes ahead with his planned attack on Ukraine, it will happen.

That weapon is the Export Administration Regulations (EAR). It allows the Biden administration to ban domestic and foreign companies from exporting high-tech semiconductors to Russia. It is an addition to the severe sanctions that Joe Biden has promised earlier.

There are many questions about how effective the rule might be at punishing Russia. However, the U.S. has revealed it in other circumstances. Administration officials say it will be a crucial lever to cut off Russia.

Under the bureaucratic language, it’s a big deal that the president of Russia didn’t expect. A non-resident senior fellow at the Brookings Institution, Douglas Rediker, talked about this matter with Yahoo Finance.

He said that Russia would be absent from all allies of the future development of AI and all other technology powering the 21st-century economy. Rediker added that it is the first time the U.S. has ever drifted something like that. He added that it doesn’t require the EU to come along.

The rule that appeared in U.S. government documents applies to American items. It also applies to foreign-produced items outside the United States subject to the EAR when they are products of industries like U.S. technology, software, or manufacturing.

The U.S weapon and other countries

On Friday, Biden said he believes Putin decided to invade while promising to keep Russia accountable for its actions.

Daleep Singh, White House Deputy National Security Advisor, added the administration’s review details. Speaking to reporters, he noted that financial embargoes restrict foreign capital to Russia. He added that export controls restrict Russia’s critical technological inputs to diversify its economy.

While Chinese companies would likely not join, Singh noted an asymmetric advantage regarding the foundational technologies. He said that Russia could not replace or repay for the rejection of these inputs from anywhere else, including China.