Biden Hits Russia With Broad Sanctions for Putin’s War in Ukraine

President Biden said on Thursday that he would turn President Putin of Russia into a pariah.

The package unveiled by the U.S. government is expected to affect companies and households in Russia. The nation's stock market fell more than 30 percent on Thursday.

The two largest Russian financial institutions, which together account for more than half of the country's banking assets, have been hit with harsh sanctions by the U.S.

The export of American technology to Russia is being barred by the U.S. officials. The United States will limit the ability of 13 major Russian companies to raise financing in Western capital markets. Families close to Mr. Putin are being punished.

The sanctions against the financial giants will cause immediate disruptions to Russia's economy but are manageable over the longer term, analysts said. Certain Russian industries could be crippled by the technology restrictions.

Mr. Biden spoke from the East Room of the White House.

The second round of American sanctions on Russia was imposed on Thursday.

The second set of sanctions was announced by Britain. They were in line with the American ones, with some additional targets, and the Russian airline Aeroflot was barred from operating in Britain. The European Union imposed an initial set of sanctions on Wednesday.

The question is whether the United States and its European allies can keep up with Russia's actions, as they claim they will. The Secretary of State spoke with the European Union's top diplomat on Wednesday and Thursday, a sign of the intense efforts to coordinate a joint response.

Some of the harsher penalties that U.S. officials had said were being considered are included in the new suite of sanctions from Washington. There was a debate about whether the operations of Russia's biggest banks and other large companies would cause too much pain to ordinary Russians.

Russia has a 1.5 trillion economy. At the start of the third year of the Pandemic, the global economy remains precarious, and many governments are grappling with the highest inflation rates in decades. The price of crude oil has gone up because of Mr. Putin.

Mr. Biden said on Thursday that he would do everything in his power to limit the pain of Americans at the gas pump. This is important to me.

The consequences for America would be worse if Mr. Putin's aggression went unanswered. We want freedom. This is who we are.

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Daleep Singh, the deputy national security adviser for international economics, told reporters that the sanctions would translate into higher inflation, higher interest rates, lower purchasing power, lower investment, lower productive capacity, lower growth and lower living standards in Russia.

The sanctions may not be enough to stop Mr. Putin's offensive, in which dozens of Ukrainian soldiers and civilians have already been killed. The sanctions will serve as a punishment if Mr. Putin pushes forward.

The pain of the sanctions will not break through to Mr. Putin, even from some of his close advisers, according to some analysts.

Alexander Gabuev, a scholar at the Carnegie Moscow Center, said that the Russian leader and the top officials around him had adopted a "bunker mentality" that their lives and wealth depended on their status at home. He said that they see themselves as being on the frontline of an ideological contest with the United States and its allies.

After the United States and Europe imposed sanctions on Russia, the government adopted fiscal policies to protect the economy.

Edward Fishman, who oversaw sanctions policy at the State Department, was surprised by the breadth of the new U.S. sanctions. He said the measures limiting access to capital markets for Russian state-owned enterprises in industries as varied as mining, metals, telecommunications and transportation were cut across the commanding heights of the Russian economy.

Russia's stock market plunged and the ruble fell to a record low against the dollar, but the country may avoid all-out financial panic. The financial measures are likely to cause serious but bearable pain, according to a former first deputy chairman of the Central Bank of Russia.

They will be able to manage the financial sector.

The new technology export controls would be more damaging.

The export controls imposed by the Commerce Department are meant to cut off the supply of advanced technologies to Russia.

The measures are expected to stop direct technological exports from American companies to Russia. New export limits on products that are manufactured outside the United States but use American equipment or technology are added to the previous sanctions.

More than $50 billion of key inputs to Russia would be restricted by the measures taken by the administration. According to the World Bank, the country imported $247 billion of products in 2019.

Emily Kilcrease is a senior fellow at the Center for a New American Security.

She said that the biggest impact would be on Russia's economy and military capability as electronics, airplanes and ships wear out and Russian entities are unable to buy new generations of technology.

It is freezing Russia's technology stock.

Chinese companies have not replicated the more advanced American products, so Russia could look to China to fill some of the technology gaps. The risk of U.S. imposed penalties on Chinese firms is the same as that on the tech giants.

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Sergei Guriev, a professor of economics at Sciences Po in Paris, said that the sanctions will not cause a macroeconomic meltdown.

He said the West would have to impose an Iran-style embargo on energy exports to destroy Russia's macroeconomic stability.

The Biden administration imposed sanctions on two Russian banks, but they are policy banks with no retail operations in Russia.

The two banks named on Thursday are the biggest banks in Russia and have retail operations. The new sanctions prevent American companies from doing business with Sberbank, which is important for global commerce.

The penalties on VTB are more severe. All of the bank's assets in U.S. financial institutions are frozen. The S.D.N. list is the most severe sanctions list and foreign companies will most likely keep their distance from it.

The Treasury Department has blocked many institutions. Three other Russian financial institutions were also blocked by the agency.

Daniel Tannebaum, a partner at Oliver Wyman who advises banks on sanctions, said that Fortress Russia is going to be the test.

Swift is the Belgian money transfer system used by more than 11,000 financial institutions worldwide. A senior Biden administration official told reporters on Thursday that the action was still on the table. Governments in Europe differ on whether to keep Russia out of Swift.

Russia's energy exports are a pillar of the country's economy, but US officials don't plan to disrupt them. Europe relies on the products and world leaders don't want oil and gas prices to go up.

European Union leaders met in Brussels on Thursday evening to discuss the details of proposed sanctions that they said would cause a heavy blow to the Russian economy.

According to documents seen by The New York Times, the bloc, which has close financial ties to Russia and shares borders with Ukraine, would probably defer several difficult decisions despite pleas from Poland, the Netherlands and the Baltic States to take a hard-line approach.

The Prime Minister of Poland has already received Ukrainian. President Putin is taking money from Europeans. He is turning this into aggression.

Alan Rappeport contributed reporting from Washington.