U.S. President Joe Biden arrived in Brindisi, Italy, late Wednesday ahead of his meeting with leaders of the Group of Seven industrialized democracies.
He came armed with fresh sanctions for Russia, a new bilateral security agreement for Ukraine, but no breakthrough on Gaza cease-fire negotiations that now sit at a critical juncture.
The United States is working with mediators Egypt and Qatar after reviewing Hamas’ response to the proposal, White House national security adviser Jake Sullivan told reporters aboard Air Force One en route to Italy early Wednesday.
“Many of the proposed changes are minor and not unanticipated,” he said. “Others differ quite substantively from what was outlined in the U.N. Security Council resolution.”
As Biden was in flight to Italy, the U.S. Treasury Department announced fresh sanctions that target individuals and companies, including those based in China, that are selling semiconductors to Russia.
It includes an expansion of secondary sanctions that allow the United States to blacklist any bank around the world that does business with Russian financial institutions already facing sanctions. The goal is to prevent smaller banks in China and other countries from funding the Russian war effort.
The sanctions also target networks Russia uses to obtain critical materials for building aerial drones, anti-drone equipment, industrial machinery and for the country’s chemical and biological weapons program, the Treasury Department said.
“We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services,” Treasury Secretary Janet Yellen said in a statement.
The Moscow Exchange, Russia’s top financial marketplace, announced it was halting trading of dollars and euros after being listed in the new sanctions.
Biden is also set to sign on Thursday a bilateral security agreement with Ukraine during his meeting with President Volodymyr Zelenskyy. The agreement is intended to show U.S. resolve to strengthen Ukraine’s defense and deterrence capabilities without committing American troops on the Ukrainian battlefield. The agreement would include Ukrainian commitment to reform and on end-use monitoring of U.S.-provided weapons.
It will be Biden’s second meeting with Zelenskyy in the span of days; the two met in Paris on the sidelines of the 80-year commemoration of D-Day last week.
Russian frozen assets
Zelenskyy will be urging G7 leaders to get behind Biden’s plan to provide Kyiv with a loan of up to $50 billion for Ukraine’s war efforts against Russia, amid Moscow’s strategic advances in the battlefield. The U.S. proposal would pay back Western allies using interest income from the $280 billion in Russian assets frozen in Western financial institutions, estimated at $3 billion a year, for 10 years or more.
The goal is a Leaders’ Declaration at the end of the summit, a “framework that is not generic, that is quite specific in terms of what it would entail,” Sullivan told VOA as he spoke to reporters in flight. However, “core operational details” would still need to be worked out. It’s unclear whether the loan will be provided by the G7 or only some of its members.
In April, Biden signed legislation to seize the roughly $5 billion in Russian assets that had been immobilized in U.S. financial institutions. But the bulk of the money, $190 billion, is in Belgium and much of the rest, is in France and Germany.
A big source of concern for Europeans is who will be responsible to cover losses should interest rates fall below expectations or if the sanctions that immobilize the funds are not renewed. Russia considers the immobilizing of its assets following its invasion on Ukraine as theft and has threatened retaliation.
Although Ukraine is not a G7 member, this is the second consecutive year Zelenskyy is attending the summit. From Italy, he heads to Switzerland for a Ukraine peace conference over the weekend.
EU puts tariffs on Chinese EVs
Biden imposed a drastic tariff hike in May to confront what he calls Chinese overcapacity in strategic green technologies and has been urging the G7 to do the same.
On Wednesday, the European Union responded to the call by announcing it would slap Chinese electric vehicles (EVs) with higher tariffs, up to 38.1%, saying the imports benefit “heavily from unfair subsidies” and pose a “threat of economic injury” to producers in Europe.
U.S. tariffs on Chinese EVs were quadrupled to a 100% rate, while solar cell and semiconductor import tariffs were doubled to 50%. The rates on certain steel and aluminum imports were tripled to 25%. The additional duties covered $18 billion in Chinese products.
Europe is taking action to address Chinese overcapacity just as the United States has done, Sullivan said. A “common framework” on how to deal with various economic security issues posed by China will likely be included in the G7 final communique, he added.
The punitive moves could prompt retaliation from Beijing, which accuses the West of hyping overcapacity claims to blunt China’s competitive edge.
Biden arrived on the global forum after a family drama. On Tuesday, a day before departing for the summit, his son Hunter Biden was found guilty on federal charges of possessing of a gun while being addicted to drugs.
Biden has said he would not use presidential powers to pardon his son. White House press secretary Karine Jean-Pierre declined to respond to further questions, including the possibility of commuting Hunter Biden’s sentence when it is given by the judge.
