Treasury Secretary Janet Yellen is warning that countries that undermine the sanctions the United States and its allies have imposed on Russia will face consequences for their actions.
“The unified coalition of sanctioning countries will not be indifferent to actions that undermine the sanctions we’ve put in place," Yellen says in prepared remarks to be delivered at the Atlantic Council on Wednesday.
The U.S. and its allies have used sanctions to weaponize the global economy against Russia over its war in Ukraine. There aren't any countries yet subverting the sanctions, but there are fears among the allies that China, which has criticized the Western sanctions, could potentially do so.
Yellen, leaving open the question of what the consequences could be, says Russia's ongoing war in Ukraine has “redrawn the contours” of the global economy, which includes “our conception of international cooperation going forward.”
Her speech at the Atlantic Council, a nonpartisan U.S. think tank, comes one week before the world’s finance ministers and central bank governors convene in Washington for the International Monetary Fund-World Bank Group Spring Meetings.
The IMF and the World Bank hold an annual conference that addresses issues affecting the global economy. This year, the meetings will take place April 18-24 in Washington both virtually and in person. The Russian invasion of Ukraine — and how world powers should manage the spillover to economies — will take center stage.
Last week, Yellen told a U.S. House panel that Russia’s aggression in Eastern Europe will have “enormous economic repercussions in Ukraine and beyond," adding that the rising prices of energy, metal, wheat and corn that Russia and Ukraine produce are “going to escalate inflationary pressures as well.”
The U.S. is currently facing historic inflation rates not seen since December 1981. The Labor Department reported Tuesday that prices in March climbed 8.5% from a year ago.
While inflation began to increase before Russia invaded Ukraine in February, the war has strained supplies of oil and gasoline. Half of the past month’s increase in consumer prices came from gas.
Yellen says in her prepared remarks that she hopes cooperating countries can tackle the world's biggest problems, despite the war.
“I see this," she says, "as the right time to work to address the gaps in our international financial system that we are witnessing in real time.”
