Hey, Airbus: Successful sanctions require all hands on deck
When Russia invaded Ukraine in February, the United States and our democratic European partners moved quickly to impose sanctions. This was an important early response, because neither the U.S. or NATO wants to engage in a hot war with Russia -- but we also cannot allow Russia’s aggression in Ukraine to go unpunished.
The sanctions have made a difference, but they are not as strong as they need to be. And for the sake of Ukrainians, the Western alliance opposing Russia’s invasion, and general world peace, they need to work.
Which is why Airbus’ decision to oppose sanctions on Russian titanium, a key element in making airplanes, is such a fly in the ointment. Economic sanctions are a short-term tool because markets, and the people who participate in markets, adjust. They learn to live without goods, they procure the goods from other sources, or they find new goods to replace the ones they can no longer access.
That is why it has been important that sanctions against Russia are as strong as possible as early as possible. They must be ironclad and robust, to work quickly before adjustments make them less effective.
But for Airbus, the sacrifice of finding new sources of titanium isn’t worth the cost of peace. “Sanctions on Russian titanium would hardly harm Russia, because they only account for a small part of export revenues there. But they would massively damage the entire aerospace industry across Europe,” an Airbus spokesman said in April. Two months later it was still holding out, the Wall Street Journal reported, “pushing against sanctions on Russian titanium sales, amid a flurry of restrictions on the export of other Russian goods ranging from vodka to steel.”
Titanium may be only a small part of the Russian economy, but all it takes is one powerful dissenter to weaken a sanctions regime. And Russian President Vladimir Putin is no fool; last month, he said that “powerful new centers have formed” to account for the sanctions against his country. Putin called the centers “revolutionary changes in the entire system of international relations” which “are fundamental and pivotal.”
Even accounting for Putin’s tendency towards overconfident verbal flourishes, he’s right that the world is adjusting -- and his country is trying to lead those changes. Russia “is making significant oil sales to India and exploring potential natural-gas sales to Pakistan to start making up for lost Western markets,” Gerald Seib writes in the Wall Street Journal. “On the diplomatic front, 35 countries -- representing almost 50% of the world population -- abstained or voted no on a March United Nations resolution condemning the Ukraine invasion, while 58 nations, including Mexico, Egypt, Singapore, Indonesia, and Qatar, abstained from a later vote to expel Russia from the UN’s Human Rights Council.”
Russia’s continued ability to find resources, make money, and continue fighting in Ukraine is bad for world peace, American interests, and even Airbus. After all, Airbus is a European company which provides weapons systems to U.S. and European governments. If Russia defeats the West’s sanctions alliance, this is bad news for Airbus’ long-term growth.
By undermining the EU, which is slowly ramping up sanctions against Russia, and America -- which is leading much of the military and diplomatic pressure against Russia -- Airbus is undermining its most important allies.
We are six months past Russia’s invasion, and the country is already adjusting to the sanctions which have been levied against it. Airbus needs to stop being a fly in the ointment, and join the rest of the respectable international corporate and nation-state community in dropping the sanctions hammer on Russia as soon as possible.
Mike Feuz is an economic consultant by day and a research associate for the think tank Free the People by night. He has a master’s degree in economics from George Mason University, and his work has been published by Real Clear Policy, the Washington Examiner, and Acton Institute.
Image: Airbus