Despite selective bans, Russian goods still flowing to US
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Russian goods such as wood, metals, and radioactive material continue to flow into the US amid bans on other goods such as food, gas, and oil.
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Port of Baltimore, US
A massive container ship pulled into the Port of Baltimore, Maryland, loaded with sheets of plywood, aluminum rods, and radioactive material – all sourced from the fields, forests, and factories of Russia.
President Joe Biden promised to “inflict pain” and deal “a crushing blow” on Vladimir Putin through trade restrictions on commodities like vodka, diamonds, and gasoline in the wake of the war in Ukraine six months ago. But hundreds of other types of unsanctioned goods worth billions of dollars, including those found on the ship from St. Petersburg, Russia, continue to flow into US ports.
AP found out that more than 3,600 shipments of wood, metals, rubber, and other goods have arrived at US ports from Russia since the war began in February, which indicates a significant drop from the same period in 2021 when about 6,000 shipments arrived, but it still adds up to more than $1 billion worth of commerce a month.
Ambassador Jim O’Brien, head of the State Department’s Office of Sanctions Coordination, told AP: “When we impose sanctions, it could disrupt global trade. So our job is to think about which sanctions deliver the most impact while also allowing global trade to work".
Experts say the global economy is so intertwined that sanctions must be limited in scope to avoid driving up prices in an already unstable market.
'Sanctions will bring illicit trade'
The Biden administration and the EU released separate lists of Russian companies that cannot receive exports, but according to AP, at least one of those companies which supply the Russian military with metal is still selling millions of dollars of metal to American and European firms.
While some US importers are sourcing alternative materials elsewhere, others say they have no choice. In the case of wood imports, Russia’s dense birch forests create strong timber that most American wooden classroom furniture, and much home flooring, are made from it. Shipping containers of Russian items, like groats, weightlifting shoes, crypto mining gear, and even pillows, arrive at US ports almost every day.
Now-banned products like Russian oil and gas continued to arrive in US ports long after the announcement of sanctions due to “wind down” periods to allow companies to complete existing contracts.
“It is a general rule: when you have sanctions, you’ll have all kinds of murky schemes and illicit trade,” said Russian economist Konstantin Sonin, who teaches at the University of Chicago. “Still, sanctions make sense because even though you cannot kill 100% of revenues, you can reduce them.”
Read more: US stops oil tanker in transit from Russia to New Orleans: WSJ
Many American companies are choosing to cut off Russian trade like Coors beer, for example, which returned a shipment of hops to a state-owned Russian company in May as part of a commitment to suspend all business in the country, as stated by Molson Coors Beverage Co. spokesperson Jennifer Martinez.
AP found more than 900 shipments totaling more than 264 million tons of metals since February.
Boeing, the world’s largest aerospace company signed a federal contract for up to $23.8 billion in 2021 and imported 20 tons of aluminum in June from Kamensk-Uralsky Metallurgical Works. In March, the US banned exports to Kamensk-Uralsky because it supplies metals to the Russian military, but placed no restrictions on imports.
Wood, nuclear material are exempt
Russia is the second largest exporter of wood after Canada and has some of the only mills that can make solid Baltic birch plywood, the main flooring used throughout the US.
On March 8, Biden announced the US is banning all imports of Russian oil, gas, and energy, “targeting the main artery of Russia’s economy" but that week, about a million barrels of Russian crude oil had arrived off the port of Philadelphia, bound for Delta Airlines’ oil refinery Monroe Energy. Meanwhile, a tanker with about 75,000 barrels of Russian tar oil pulled into the port of Texas City, Texas, bound for Valero’s refineries after a long north Atlantic crossing, according to trade records.
The shipments continued to Valero, ExxonMobil, and others, as ExxonMobil media manager Julie King told AP a July oil delivery was of Kazakh origin and thus not subject to sanctions.
Just this year, almost 4,000 tons of Russian bullets also arrived in the US, where they were distributed to gun shops and ammunition dealers. Some were sold to US buyers by Russian state-owned companies, while others came from at least one sanctioned oligarch.
AP also tracked millions of dollars worth of shipments of radioactive uranium hexafluoride from Russian state-owned Tenex JSC, the world’s largest exporter of initial nuclear fuel cycle products, to Westinghouse Electric Co. in South Carolina. It is to be noted that nuclear material is not sanctioned.
Westinghouse spokesperson Cathy Mann said that as part of the nuclear fuel manufacturing process, their fuel fabrication facilities receive enriched uranium product and convert it into fuel pellets. She said Westinghouse doesn’t own the uranium used to make fuel. That material belongs to customers who operate nuclear power plants throughout the world.
