Russia’s Invasion of Ukraine – The Impact of U.S. Sanctions
Government “watches the US-Russia foreign ministers’ meeting today”
The Korean government is keenly aware of the impact on Korea if Russia invades Ukraine and a war breaks out. An official from the Ministry of Foreign Affairs said on the 20th, “We are closely monitoring the outcome of the US-Russian foreign ministers’ meeting on the 21st to discuss a solution to the situation in Ukraine.”
Reuters reported on the 19th that the US could block Russia’s access to global supply chains, including semiconductors. This means that Samsung Electronics and LG Electronics, which export smartphones and home appliances to Russia, will also suffer damage.
According to the Korea International Trade Association, Russia mainly exports energy and raw materials to Korea. Conversely, Korea exports a lot of automobiles and auto parts to Russia. If Russia is withdrawn from the ‘International Interbank Network (SWIFT)’, which is a dollar payment network, as the US has warned, high-strength sanctions are imposed and trade will actually stop because Korea and Russia cannot settle their export payments with each other. Kim Kkot-byul, a senior researcher at the Korea International Trade Association’s Trend Analysis Office, said, “In wartime conditions, Russia may control the export of raw materials. “We are concerned about the damage to domestic petrochemical companies that depended on Russian naphtha, bituminous coal, crude oil and natural gas,” he said. If a war breaks out, the international oil price could exceed $100 per barrel, and the burden on companies is expected to increase.
The safety of 800 Koreans living in Ukraine is also a concern. The Blue House held a National Security Council (NSC) on the 20th and announced, “We have decided to take necessary measures, such as protecting our businesses and the public.”
Reporter Lee Eun-taek nabi@donga.com
By Choi Ji-seon, staff reporter aurinko@donga.com
