(Bloomberg) -- President Joe Biden sought to show his determination to stand up to Russia in announcing fresh sanctions on Friday, but his resolve only went so far over concerns that the toughest measures left in the US arsenal risk roiling the global economy. 

A 200-page list of targets based in Russia, the United Arab Emirates, China and other nations was the biggest single-day package of financial punishment since Russia invaded Ukraine two years ago. Just as notable, though, were companies and sectors missing from the expansive list: the metals sector, more energy-related punishments, and secondary sanctions on banks.

That caution reflected how for all of Biden’s talk about the sanctions, his team is still unwilling to go after revenue streams that experts argue would really cripple Russia’s economy, for fear of setting off broad shocks that could rebound on the US economy.

Possible targets for a more aggressive approach could include the foreign banks that help Russia procure the technology and materials it needs to continue the war, as well as the trade in enriched uranium and metals such as aluminum and nickel. The US could also potentially seize — and distribute — frozen Russian sovereign assets. All of those measures carry significant risks.


 “To really affect Russia, we’re going to have to take more strategic actions that may have detrimental effects on the broader global economy,” said Kim Donovan, a former Treasury official and director of the economic statecraft initiative at the Atlantic Council. “We’re going to have to start making more difficult decisions and accept the impact that goes along with those decisions.” 

Indeed, the list Friday was filled with names of people and entities that have already been sanctioned or have limited links to the US financial system, reducing their impact. There was the warden of the prison where Russian dissident Alexey Navalny died this month and the deputy director of the Federal Penitentiary Service. Also targeted was a Russian shipbuilder that helped produce 15 liquefied natural gas tankers.

In the meantime, what’s still missing is the action Ukraine really wants: approval of $60 billion in fresh armaments and munitions. Biden’s request for that money is tied up in the House of Representatives.

The Ukrainians appeared to agree. Mykhailo Podolyak, an adviser to President Volodymyr Zelenskiy, said the only western action that would really scare President Vladimir Putin is providing more weapons.

“Lots of weapons,” Podolyak said in a post on X, formerly known as Twitter. “A really big amount of weapons for Ukraine. Long-range, anti-missile, anti-marine weapons. The rest is a fiction, delayed awareness, chronicling of the process, prolongation of the war, a dangerous illusion that it is possible to ‘sit out.’”

The sanctions come at a precarious time for the Ukrainian government. A counteroffensive mounted last year failed to meaningfully shift the battle lines and the Russian military recently captured Avdiivka, a bitter symbolic defeat. Meanwhile, Washington continues to dither on additional aid, with a supplemental spending package passed by the Senate stalled out in the House.

Senate Majority Leader Chuck Schumer is visiting Kyiv this weekend to reassure Ukrainians that something will be done but Congress has its plate full over the next few weeks with a government shutdown fight looming large on the calendar. The 2024 US presidential election hasn’t helped matters, with Biden pitching Ukraine aid as necessary to protect against the spread of autocracy and former President Donald Trump opposing it as inconsistent with his America First platform.

As for the Russian economy, it continues to chug along despite the sanctions. 

“The latest announcements mark only an incremental tightening of the sanctions regime and we still estimate that Russia’s economy will expand by around 1% to 1.5% in 2024,”  Alexander Isakov, Russia economist at Bloomberg Economics, wrote in a note.

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Further complicating matters is the fact that Russia has willing partners in China, Brazil and other countries that continue to purchase its oil and ship it supplies. While those countries still account for less than half of global GDP, they represent a growing share, according to Bloomberg Economics. 

“It seems that the west is not quite ready to pull the type of levers that would really make a big difference for Russia’s economy,” said Eddie Fishman, a senior research scholar at Columbia University’s Center for Global Energy Policy. “Namely aggressively targeting its energy revenues, its oil revenues, and imposing secondary sanctions on banks that are helping Russia access the international financial system.”

US officials suggested there would be more to come. In an interview with Bloomberg Television on Friday, Deputy Treasury Secretary Wally Adeyemo said the US is exploring options to use $300 billion in Russian state assets to help pay for Ukraine’s reconstruction.

“We’re looking for ways to unlock the economic value of those reserves for the Ukrainian people,” Adeyemo said.

©2024 Bloomberg L.P.