U.S. Threatens Sanctions on Chinese Firms Aiding Russia's Military in Ukraine

On Monday, U.S. Treasury Secretary Janet Yellen delivered a strong warning, asserting that the United States is prepared to impose sanctions on Chinese banks, companies, and even Beijing's leadership if they are found to be aiding Russia's armed forces in the invasion of Ukraine. In an interview with CNBC's Sara Eisen in Beijing, Yellen stated, "We stand ready to act if we see significant violations, especially by financial institutions." She emphasized that any form of assistance to Russia's military in the ongoing conflict with Ukraine is deemed unacceptable by the United States, and that the U.S. possesses the capability to enforce sanctions.

In December, President Joe Biden issued an executive order conferring the authority to sanction financial institutions that support Russia's military-industrial complex to the Treasury secretary. Yellen confirmed that the Treasury Department has not yet utilized this sanctioning tool.

China's Relationship with Russia and the United States

Yellen acknowledged China's entitlement to maintain a relationship with Russia, particularly in the realm of trade, which the U.S. perceives as largely unproblematic. However, she cautioned that any provision of military aid from Beijing to Moscow could trigger sanctions. Yellen, who has been engaged in discussions in China for several days, including meetings with Vice Premier He Lifeng, is scheduled to depart for Washington.

During her visit, Yellen emphasized U.S. economic interests while seeking to address the delicate diplomatic relationship between the two global superpowers. She raised concerns about Chinese overcapacity in the green energy industry, specifically mentioning solar panels, electric vehicles, and lithium-ion batteries. Yellen highlighted the disparity between Chinese government subsidies and the domestic demand for these products, expressing apprehension that surplus Chinese products could flood global markets and undercut other companies.

Yellen pointed out that the overcapacity issue is just one of the many trade tensions characterizing the U.S.-China relationship in recent years. The initial round of tariffs imposed by former President Donald Trump in 2017 and retained by President Biden have contributed to the strained economic and trade cooperation between the two nations.