When the Obama administration imposed sanctions on Russia for invading Ukraine, American officials were hoping they would deter Putin from further aggression.
The officials argue that the sanctions prevented Mr. Putin from ordering Russian forces beyond where they had stopped. Mr. Putin was able to hold on to the peninsula. On Monday, he ordered more troops into eastern Ukraine, where thousands of Russian soldiers have been operating, and said the Kremlin was recognizing the enclaves as independent states.
The White House believes that Mr. Putin is in an invasion and is taking steps to stop him.
Mr. Biden said on Tuesday that a new set of sanctions would be imposed.
The effects of sanctions imposed on Russia have not been studied by American officials. He told reporters that his country had grown more self-sufficient in the face of Western sanctions. It is important for us to raise the level of our economic sovereignty in the future.
Analysts say that Mr. Putin and his associates in Moscow might not suffer much from the sanctions.
Mr. Putin's decision on Monday to press ahead with the troop movement suggests that he has concluded that the costs of new sanctions are manageable. In a meeting of his Security Council in Moscow, several of his top aides made that point to him.
The Biden administration might have to impose the most severe sanctions on Russia if they are firm in their mind-set. Mr. Biden said he wouldn't send American troops to defend Ukraine.
Alexander Gabuev, the chair of the Russia, said that some of the hard-line nationalist men around Mr. Putin were already on a Treasury Department sanctions list and would no longer have ties to the United States or Europe for the rest of their lives.
He said that they are the powerful everybody in Russia. They are completely secluded. They are the kings and can only be secured in Russia.
They are the very guys who are benefiting from the economy becoming more detached from the outside world because of their roles in state-owned enterprises.
They have adopted a siege mentality because of their belief in the United States and its sanctions policies. The majority of my contacts in the government believe that.
The United States has imposed sanctions against three sons of senior officials in Russia, as well as restrictions on Russia's ability to raise revenue by issuing debt. The costs are not expected to be felt in Russia, the two banks are policy institutions, and American officials could eventually announce more painful steps.
The announcement followed an executive order issued by Mr. Biden that prohibits business dealings between Americans and entities in the Russia-backed eastern enclaves of Ukraine. A US official said that the Biden administration would have the authority to impose sanctions on anyone operating in those areas.
The assets of five Russian banks and three Russian billionaires were frozen by Britain. Germany stopped certifying the Nord Stream 2 natural gas line that would connect to Russia.
The White House, State Department and Treasury Department have spent weeks coordinating a response with European leaders and major financial institutions and say they are able to act almost immediately as Russia escalates its actions.
If the Biden administration follows through on the most severe options that have been suggested, it could mean severing the country's top banks from transactions with non-Russian entities. Middle-class and lower-income families would most likely be struck by the effects. Russian enterprises would not be able to receive payment for energy exports.
The ability to purchase critical technologies from American companies would be cut off if the U.S. sanctions are adopted.
Maria Snegovaya, a visiting scholar at George Washington University who co-authored an Atlantic Council paper on U.S. sanctions, said there will be unexpected and unpredictable consequences for global markets.
Edward Fishman, a top State Department sanctions official in the Obama administration, called Mr. Biden's action on Tuesday a modest first step intended as a shot across the bow.
Diplomatic efforts failed. The United States, NATO and Russia have been engaged in diplomacy to prevent the conflict from getting out of hand. In December, Russia made a number of demands, including a guarantee that Ukraine would never join NATO. The demands were dismissed by the West.
Mr. Fishman said that the United States had cut off a state-owned Russian bank for the first time.
Biden is giving Putin a chance to step away from the brink.
Mr. Putin could be tested by a severe economic disruption. Many analysts think that the United States and its European allies will not follow through with the toughest options that they have considered, as they may be discouraged by fears over their own economies.
Western officials have not proposed cutting off Russia's lucrative energy exports. Experts say that a move against Russian energy revenues would have the biggest impact, but that it would also lead to a precarious political situation for Mr. Biden and other world leaders as oil and gas prices rise in a period of high global inflation.
High market prices for oil and gas have aided the Russian government's efforts to restructure its budget and finances so that it can survive further sanctions. It has relatively low debt and is less dependent on foreign loans. The central bank's foreign currency reserves are the fourth largest in the world.
Russian state-owned enterprises and private companies have benefited from the U.S. sanctions. Kremlin policies aim to replace Western imports with Russian and non-Western products that raise the profits of those businesses. Some of Mr. Putin's allies and their families have done well. Mr. Gabuev said that Dmitry Patrushev, the minister of agriculture, and his family have become wealthier because of new agriculture industry policies.
China's president could help Mr. Putin get around some of the sanctions. When the two leaders met in Beijing at the start of the Winter Olympics, their governments announced a 30-year contract in which China would purchase gas through a new line. Chinese companies might be able to fill some of the supply chain gaps created by the U.S. technology exports to Russia being stopped.
Chinese leaders would probably be careful with their large state-owned banks doing business with Russian banks that are under sanctions from the U.S.
Daniel Russel is a former assistant secretary of state for East Asian and Pacific affairs and an executive at the Asia Society. They can hide behind a lot of black market stuff.
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