U.S. Commerce Department data released Wednesday underscored that sanctions are a double-edged sword: U.S. exports took the hardest hit, plummeting 34% on the month to the lowest level since January last year. Imports from Russian firms, meanwhile, fell nearly 10%, the third consecutive month of declines in U.S. purchases. That asymmetric fall between buying and selling pushed the trade gap with Russia up 25% to $1.13 billion.
The Russian economy is bearing the brunt.
Although U.S. sanctions directly affecting Russian firms in June cover just a small share of the economy, the fear of additional sanctions often has a much broader impact on the economy. The combined effect of sanctions and falling investment has pushed the country into recession and sparked an investor exodus the International Monetary Fund says could translate into a $100 billion in capital fleeing out of Russia this year.
The falling-trade trend may continue in July: Washington, along with its European partners, ratcheted up the sanctions again last month and analysts say more may be coming. President Vladimir Putin this week announced his own round of retaliatory penalties.
