Yasin Ebrahim
Investing.com -- U.S. President Joe Biden announced Thursday wider sanctions aimed to further cripple Russia's economy and its access to key technology imports after Russian President Vladimir Putin initiated a full-scale military invasion on Ukraine.
"Today I'm authorizing additional strong sanctions and new limitations on what can be exported to Russia," Biden said. "This is going to impose severe cost on the Russian economy, both immediately and over time."
Putin announced a "special military operation" to “denazification” Ukraine. The order to invade Ukraine comes as efforts to find diplomatic solution to deescalate tensions ran out of road.
The sanctions will block four more major banks including VTB, freezing Russian assets in America, and also restrict Russia's ability to import key technology needed to upgrade their military and industrial capacity.
"As we squeezed Russians access to finances and technology for strategic sectors of its economy can degrade its industrial capacity for years to come," "We estimate [the sanctions] the will cut off more than half of Russia's high tech imports ... [limiting] their ability to continue to modernize their military," Biden added.
Biden also said that the U.S. was prepared to respond in-kind to any cyber attacks from Russia on U.S. companies.
Earlier this week the U.S. announced a first trance of sanctions aimed at two Russia banks and elites individuals who were backing the Kremlin's invasion of Ukraine. Biden followed up those measures with sanctions on Nord Stream 2 AG, the company tasked with of building Russia's Nord Stream 2 gas pipeline.
The sanctions are expected to take time to have the desired impact, Biden added.
As the waiting game on the impact of sanctions unfolds, geopolitical tensions will remain elevated and may prove the final headwind that tips the broader market over the edge into bear market territory.
"I don't see how we can get a resolution on the Russian-Ukraine crisis because these sanctions are likely to stay in place unless Russia withdraws from Ukraine ... we don't expect that to happen," Phillip Toews, CEO & portfolio manager of Toews Asset Management, told Investing.com on Thursday. "I I think this may be the last ingredient we need to see a full blown bear market in broader U.S. indices and international markets."