US, EU Need ‘Much Tougher’ Sanctions on China for Supporting Russia, Analysts Say
The U.S., the EU and others should pursue tougher enforcement on Chinese companies that continue to supply Russia’s military industrial complex and continue to buy Russian oil, panelists said during an event this week hosted by the Peterson Institute for International Economics. One said the EU should consider automatically sanctioning any Chinese company whose products are found more than once in drones, missiles or other military items used by Russia.
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“We need to be much tougher on individual Chinese firms,” said Jacob Funk Kirkegaard, a nonresident senior fellow with PIIE and former official with the Danish Ministry of Defense. “There needs to be, in my opinion, a near automaticity in EU sanctions on companies whose products are found repeatedly, maybe twice or three times, in such drones. They need to be hit by EU sanctions.”
Both Kirkegaard and Torbjorn Becker, director of the Stockholm Institute of Transition Economics, said the U.S. and the EU should look to increase pressure on Russia by more forcefully pushing China and India to stop doing business with the country. Becker said there needs to be “more serious talks about what kind of stuff Russia is buying” from those nations, although both panelists said they weren’t sure whether the U.S. would follow through with tougher sanctions.
“If [President Donald] Trump made some serious steps towards actually implementing the type of sanctions he has been discussing, that would change the negotiating table from the outset,” Becker said. “But if you keep threatening and never implement what you're saying that you're going to do, to me, that's giving away your negotiating power.”
Kirkegaard made similar points, saying it’s not clear whether Trump is willing to impose new sanctions against Russia. He also said the results of the Trump-Vladimir Putin summit last week were unclear. “We do know one thing,” he said of Trump. “We do know that he seems to have put off the threat of further economic sanctions on Russia for the time being, perhaps for a very long time.”
Secretary of State Marco Rubio said earlier this week that the U.S. has been hesitant to impose new Russia sanctions because it believes those measures will undercut any chance of a peace deal “for the foreseeable future” (see 2508180005).
Kirkegaard also noted that there wasn’t any public talk of sanctions during meetings Trump held with European leaders in Washington after the Putin summit. “There was no discussion of how to actually increase pressure on Russia,” he said. “So my concern there really is that -- as we move forward without additional economic or, for that matter, military pressure on Russia -- what incentive does Putin have to suddenly agree to something that he has obviously been resisting in the last three-and-a-half years?”
Kirkegaard suggested the EU start increasing pressure by doing “a lot more on actually enforcing our technology sanctions,” particularly against Chinese companies sending microelectronics and other parts to Russia. He said Russia has been able to produce drones and missiles “almost exclusively through the purchase of Chinese components,” calling for “secondary sanctions” against Chinese companies.
“So absolutely, much tighter, much tougher, secondary sanctions, which traditionally is an area that the EU has not been so willing to engage in,” Kirkegaard said. He added that the EU has leverage to impose those sanctions against Chinese companies because, with the U.S. still imposing high tariffs against China, the EU is the “only remaining high-margin, large, advanced economic market for China.”
He said that gives Europe “negotiating power” to tell China: “Look, if you still want relatively unfettered access to the EU market, you've got to rein in those companies that are actively helping the Russian war effort.”
Becker agreed, saying that although the EU also should pressure India to lower its purchases of Russian oil and its continued business with Russia, “the even bigger price is China.”
“To me, it seems like the U.S. and also Europe are still being way too careful with China,” he said. He said the EU should threaten to impose high tariffs on China if it continues to both buy oil from Russia above the global price cap and to sell components to Moscow’s military-industrial base.
“I know that we are afraid of the impact on our economies, but we have to remember that the alternative to this is not that it doesn't cost us anything,” Becker said. “It will cost us a lot of money if we don't make sure that this war ends in a favorable way to Ukraine and not in a favorable way to Russia.”