When are sanctions not sanctions?

Key Points:

·  Ever since the Russian invasion of Ukraine, the US and the EU, in attempt to show Western resolve and unity, have put in place various sanctions, which they have attempted to ramp up over time. Yet, the sanctions implemented so far have been as much about minimising the impact to the West as they go towards penalising Russia.

·  Three years on, and even with the price of oil down to US$60/bbl, the Russian economy is still able to support the war. Which may be hardly surprising at all, when you discover that Germany has spent more on buying Russian oil and gas than on supporting Ukraine.

·  Russia has managed to pivot its energy exports east, through subtle and not so subtle means. Malaysia became a massive importer of Russian oil suddenly, while at the same time Russia’s exports of oil to China also surged.

·  Georgia has a complex and troubled relationship with its next-door neighbour Russia. Although Germany banned the export of luxury cars to Russia, curiously enough, exports, particularly car exports, to Georgia surged at the same time. Instead of driving round Tbilisi, these cars mysteriously ended up over the border in Russia. Everybody knows this is happening; it’s just too much trouble to stop it.

·  So when Trump slaps tariffs on goods from China, watch how global trade patterns start to alter. Places like Thailand, Indonesia, Vietnam, and Bangladesh could suddenly see a big increase in their exports to the US.  Who would have guessed that might happen?