Cold War or Cool Calculation?

NEW YORK – With escalating violence in southern and eastern Ukraine and no solution in sight, the Ukraine crisis has become the world’s most turbulent geopolitical conflict since that triggered by the terrorist attacks against the United States in 2001. The US-led sanctions strategy will neither deescalate the tensions between the West and Russia nor bolster the imperiled pro-Western Ukrainian government. But, even with tightening sanctions against Russia and growing violence in Ukraine, there is little chance that Cold War II is about to start.

The US approach has been to ratchet up sanctions in response to Russian aggression, while ensuring that America’s allies remain united. At a recent joint press conference, President Barack Obama and German Chancellor Angela Merkel announced a new, lower threshold for additional sanctions. Previously, that threshold was a direct Russian military invasion; now, as Merkel explained, if Russia disrupts Ukraine’s May 25 elections, “further sanctions will be unavoidable.”

But Merkel and Obama also lowered the bar for what those “further sanctions” would be. Instead of launching sweeping sectoral measures that would target vast swaths of the Russian economy – a big step toward “Iran-like” sanctions against Russia – it now seems that the next round will be only incremental. The elections threshold makes another round of sanctions virtually certain, but allows the tightening to be more modest and gradual.

Why slow down the sanctions response? The Americans understand that if they go too far too fast, Europe will publicly break with the US approach, because the Europeans have a lot more at stake economically. Whereas the US and Russia have a very limited trade relationship – worth around $40 billion last year, or roughly 1% of America’s total trade – Europe’s financial exposure to Russia, as well as its reliance on Russian natural gas, make it far more hesitant to torpedo the economic relationship.