The ban on gold imports, which could amount to a penalty of tens of billions of dollars, appears to be the new primary economic sanction targeting Russia for its exit from the top. Administration officials declined to comment on whether further punitive steps would be taken.
“The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war against Ukraine,” Biden said. chirp Sunday morning, noting that gold is “a major export that generates tens of billions of dollars for Russia.”
Biden and other leaders of industrialized countries began their meetings in southern Germany on Sunday for a summit that will be dominated by debates about the fallout from the war in Ukraine.
Biden, who arrived late Saturday night, attended mass with a US Army chaplain before beginning his day with a one-on-one meeting with German Chancellor Olaf Schulz to discuss the war.
The two leaders had a short talk in which Biden, whose Alps were shaded, quipped that he used to ski a lot but hadn’t done so in some time. “It’s beautiful,” he said.
The conversation then became more serious, as Biden thanked Schulz for Germany’s determination and ability to keep the alliance united. “We have to stay together. Because Putin was counting from the start that NATO and the G7 would somehow break up,” Biden said. “But we didn’t, and we won’t.”
In the afternoon, summit leaders announced a new global infrastructure investment program, with the goal of mobilizing $600 billion in public and private investment by 2027. The spending — with the United States pledged $200 billion — aims to improve health, communications and infrastructure energy in low- and middle-income countries. It aims to help counter ambitious spending worldwide by China, which has invested heavily in Africa and Asia through its Belt and Road Initiative.
“Our nations and our world are at a true inflection point in history,” Biden said.
Some of the initial plans highlighted by Biden administration officials include a $2 billion project to develop a solar panel project in southern Angola; building communications cables that would link Singapore to France across Egypt and the Horn of Africa, expanding access to high-speed Internet; and construction of a large multi-vaccine manufacturing facility in Senegal.
The day also included hints of rifts between some of the top leaders, including French President Emmanuel Macron and British Prime Minister Boris Johnson.
Downing Street said in a statement Johnson had “stressed” Macron That ‘no attempt to settle [Ukraine] Conflict now will only lead to permanent instability and will give Putin license to manipulate both sovereign states and international markets forever.”
The comments appeared to be a criticism of Macron’s mid-June comments that Ukrainian President Volodymyr Zelensky and his officials would need to negotiate with Russia at some point. Before Macron, Schulze and other European leaders traveled to the Ukrainian capital, Kyiv, those comments raised concerns among Ukrainian officials that France and Germany might push for talks with Russia as the war’s economic toll mounts.
French officials dismissed those concerns and made it clear that it was up to Ukraine to decide when the talks would take place. A spokesman for the French presidency said on Sunday that Macron and Johnson “had a discussion on Ukraine in which the president strongly affirmed his intention to support Ukraine.”
France has either delivered or pledged nearly a quarter of its current stocks of Caesar artillery weapons systems to Ukraine, and the country’s lesser dependence on Russian fossil fuels has allowed France to become an early champion of the European Union’s embargo on Russian oil.
But Macron and Schulze have spoken with Putin several times by phone since the invasion, which has drawn criticism, especially in Eastern Europe.
The United States has been pressing for an agreement to cap the prices of Russian oil imports to harm Moscow’s ability to finance the war. G7 leaders are moving toward consensus on a price cap, according to a person familiar with Sunday’s discussions who spoke on the condition of anonymity to discuss private talks.
The goal is to cap the amount countries pay for Russian oil, hoping to damage Moscow’s ability to finance the war, while trying to curb inflation at the fuel pump. High oil prices have limited countries’ efforts to diversify from Russian energy because Moscow gets more money for less.
To motivate other countries to get involved, leaders discussed ways to make it difficult to secure or ship Russian oil that does not meet the price ceiling.
During Sunday’s meeting, Macron stressed that the price cap should also include gas. Price caps for Russian natural gas flowing in pipelines to Europe are easier to enforce because the infrastructure means it cannot be sold elsewhere.
Schulz warned that capping oil prices would only be beneficial if all buyers were on board. “The questions that need to be resolved are not trivial,” said a German official. “But we’re on our way to finding a deal.”
Italian Prime Minister Mario Draghi has raised concerns about the potential political fallout from the price hike. “The energy crisis should not produce a resurgence of populism,” he said, according to the individual with details of the discussion.
“Putting a cap on the prices of imported fossil fuels from Russia has a geopolitical goal as well as an economic and social one,” Draghi said. We need to cut our funding to Russia. We must eliminate one of the main causes of inflation.”
During a briefing with reporters ahead of the summit, administration officials described the move to ban gold imports as important evidence that the world’s largest economies are willing to continue to punish Russia, one of the world’s largest exporters of gold. The official announcement will come on Tuesday, according to administration officials, and the US Treasury will make an official decision to ban new imports of gold.
“The United States has mobilized the world to impose large and rapid economic costs to deprive Putin of the revenue he needs to fund his war,” said one of the officials, who spoke on condition of anonymity under the basic rules of the briefing.
The official hinted at additional steps that could be taken to isolate Russia further, but indicated that these steps will take place in the coming weeks, not immediately as part of the summit.
“This is a major export, a major source of revenue, and a major alternative to Russia, in terms of its ability to transact in the global financial system,” the official said. “Taking this step cuts that capacity and again is an ongoing illustration of the kinds of steps the G7 could take collectively to further isolate and isolate Russia from the global economy.”
One of the goals of the United States and its international partners, the official said, is to prevent Russia – which has found ways to get around previous sanctions – from evading the ban on imports. Administration officials say the fact that they moved toward banning gold imports was an effective signal that Russia’s other ways of accessing global financial markets had been cut off.
For example, the Russian oligarchy has sought to buy gold bullion as a way to avoid the financial impact of Western sanctions, and the leaders of the Group of Seven major industrialized nations hope this will send another signal to Putin’s top allies.
“The measures we announced today will hit directly the Russian oligarchs and hit the heart of Putin’s war machine,” Johnson said, in announcing the ban on gold imports.
“We need to starve the Putin regime of funding,” he added. “The UK and our allies are doing just that.”
Ashley Parker of Telfs and Annabelle Timsit in London contributed to this report.
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