How to punish Russia for Ukraine

The United States has threatened to sanction Russia if it invades Ukraine.

But, what, exactly those sanctions might look like — and how punishing they might be — will depend not just on what Russia does, but on the costs the United States and its allies, especially in Europe, are prepared to withstand.

This is the dilemma facing the United States, which has ruled out deploying forces to Ukraine. The most aggressive sanctions, like making it extraordinarily difficult for Russian financial institutions and state-owned banks to trade in US dollars, could inflict a lot of hurt on Russia, and very likely, its people, if the sanctions sparked inflation or other economic crises. Other dramatic options exist, like blocking Russia’s biggest exports, oil and gas.

But the more far-reaching and destructive to the Kremlin, the more potent the potential reverberations in the West. The most severe sanctions, like cutting off Russia from all or parts of the global financial system, may hurt other economies intertwined with it. The US and Europe are not exempt. Russia may take counter or retaliatory measures, too. The most feared scenario would be Russia cutting off natural gas supplies to Europe, in the middle of winter, when gas prices are already spiking.

“The problem is where it hurts the most — for example, to cut the import of Russian gas or oil — that fires back on the EU and the US,” said Maria Shagina, a visiting fellow at the Finnish Institute of International Affairs.