The Treasury Department is concerned that imposing new sanctions on Russia could hurt the American economy, Bloomberg reported Friday. In a report given to members of Congress this week, the Treasury reportedly argues that Russia is so entrenched in the global economy that sanctions on "[Russian] debt and derivatives could destabilize financial markets," which would negatively affect the U.S. economy.
The sanctions, which are vehemently opposed by the Russian government, could also "lead to Russian retaliation against U.S. interests," the Treasury warns.
Concerns about the negative impact of Russia sanctions are not unfounded. Bloomberg notes that the American investors "BlackRock Inc., Stone Harbor Investment Partners, and JPMorgan Chase & Co. are the three biggest holders of [Russian] debt." In the event of heavy sanctions on Russian debt, the Treasury expects American investors would curtail their business with Russians, which it claims could put U.S. bankers at a competitive disadvantage.
The report, Bloomberg says, is "another instance in which [President Trump's] administration seemed to take a softer line on Russia." Earlier this week, the Trump administration declined to impose additional sanctions on Russia for their meddling in the 2016 election, claiming that the existing sanctions were sufficient enough punishment. The Treasury Department also released a Forbes-sourced list of Russian "oligarchs" with ties to the Russian government, but did not levy additional sanctions upon them.
Read more at Bloomberg.