(FinancialPress) — The Trump administration has played a new hand of economic sanctions, this time aimed at Russia – its businessmen, companies and government officials. The effect was immediate, as Russian stocks dropped over 10% and its currency, the ruble, dropped a full 4% on Monday.
While the sanctions are meant to be targeting only companies believed to be engaged in what officials called “maling activity“, the White House could expand their reach to hit non-US citizens that act as facilitators for those same companies to execute transactions.
Several of the affected companies deal with commodities, such as aluminum, that trade in dollars. Meanwhile, however, most of their cash is held in Russian currency – which would make those who facilitate simple currency exchanges as targets of the new set of sanctions.
One of the biggest targets on the US sanction list is Oleg Deripaska, owner of Rusal – a major aluminum producer. The company‘s stock dropped a walloping 25% by the end of Monday‘s trading session. It also lost 50% in the Hong Kong exchange, in which it also trades. As Rusal produces 6% of the global provision of the metal derivate, the commodity‘s price rose 2% on Monday.
While the US sustains that the impositions are a response to alleged malfeasance by the Kremlin in Syria, Ukraine and the West, it‘s worth noting that the timelines of this set of sanctions and the one imposed on China seem to be in line with each other. The latter began in early March, with tariffs imposed on the American import of aluminum and steel.
Russia is certainly not pleased – going on record calling the sanctions “scandalous“ and “illegal“ – and has already began preparing a retaliatory plan of its own.