Weaponizing the economy will worsen growth outlook

Since the Russia-Ukraine conflict broke out, the United States has avoided direct military involvement. Instead, it has launched a hybrid war against Russia through large-scale military aid to Ukraine and crippling sanctions.

It has not only excluded Russian banks from the Society for Worldwide Interbank Financial Telecommunication, but also imposed restrictions on Russian enterprises and entities, exerted export controls on Russia's high-tech products and banned imports of Russian oil and gas.

Clearly, the US' unprecedented sanctions are not aimed at stopping the war in Ukraine, but at exhausting Russia both militarily and economically.

For example, when talks between Russia and Ukraine showed positive signs on March 29, the US and its allies said they would increase sanctions against Russia, revealing the lengths to which the US will go to maintain its hegemony.

However, Kristalina Georgieva, managing director of the International Monetary Fund, has warned that sweeping sanctions against Russia will shrink global trade, push up food and energy prices sharply and worsen the outlook for global economic growth this year.

Oxford Economics forecasts that the sanctions could reduce the eurozone GDP by half a percentage point by the end of 2023. Further escalation of sanctions could trigger a serious crisis for the global economy, trade, finance, energy, food, industrial and supply chains.

"Financial terrorism" by the US has contributed to global poverty and inequality. Over the past two decades, sanctions imposed by the US have increased tenfold. Recently, the US government diverted $7 billion in frozen Afghan assets for other purposes. By freezing the assets of Russia's central bank, the US has once again savagely turned the normal rules of international finance into a vehicle for its predatory activities.

But such "financial terrorism" by the US will inevitably end up undermining it. Gita Gopinath, first deputy managing director of the IMF, said the global economy might reconsider holding foreign exchange in dollars.

Even US allies are trying to circumvent the negative effects of US sanctions. As early as 2019, the EU established a "Trade Swap Support Facility" to promote euro settlement in its foreign trade in order to continue trade with Iran despite US sanctions. Now more countries are considering setting up independent clearing channels.

The US should abandon its Cold War mentality and work to safeguard long-term peace and sustainable development of the world.