A war in Ukraine – even a short one, even with no US troops on the ground – would ripple throughout the global economy and challenge the international order the US spent decades constructing and defending.
Why it matters: Every time Vladimir Putin provides the slightest hint of his intentions toward Ukraine, markets move and heads of state scramble. An invasion could have enormous implications for the US
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Global markets have been battered by the warnings of war, and they rose on Tuesday after Putin said he’d give diplomacy another chance.
Russia is a major exporter of oil and other commodities, and Biden warned that an invasion could lead to higher energy prices. The fear of war has already driven average US gasoline prices close to $ 4 per gallon for the first time in nearly 14 years, Axios’ Nathan Bomey writes.
Russia is also Europe’s primary source of natural gasand countries like Germany fear a spike in already high prices in the event of war, possibly as retaliation for western sanctions.
The US and its allies have promised “unprecedented” sanctions if Putin does invade. Those could restrict access to key technologies and make Russia even more economically reliant on China.
The Chinese government will be closely watching the West’s response to the situation in Ukraine and the implications for China’s own threat to bring Taiwan under its control by force.
The White House has warned that an invasion could begin even before the Winter Olympics conclude, despite speculation that Putin would not want to jeopardize his increasingly close relationship with Beijing.
Between the lines: Biden’s speech on Tuesday was in part a call to arms to defend the international rules of the road, which were largely authored from Washington and are increasingly challenged by Moscow and Beijing.
The crisis has been a massive drain on the attention of an administration that had intended to focus on competition with China, and is arguably Biden’s second major foreign policy crisis after the chaotic exit from Afghanistan.
What they’re saying: Putin claims Russians and Ukrainians are “one people.” He has defended Russia’s right to a sphere of influence, with Ukraine – with its deep historical and cultural links to Russia – at its heart.
A full-scale war would be a hazardous endeavor for Russia, though its military capabilities far outstrip Ukraine’s. The cultural ties also cut both ways, notes Alexander Baunov of Carnegie Moscow. “You cannot invade Ukraine without hurting the relatives of your own citizens.”
Ukraine’s government, meanwhile, is contending with the threat of an invasion that could threaten the country’s very existence, while trying to tamp down panic that is already wreaking havoc on the Ukrainian economy.
What to watch: Putin seems to be relishing his place at the top of Biden’s agenda, and a chance to flex Russia’s revived superpower status. His next moves will reverberate far beyond Ukraine.
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