As Russia continues to amass troops near its border with Ukraine, the rest of the world waits to see if there will be aggression or a step back. NATO powers have been united in their condemnation of the aggression (though not in the level of material support) and vow to implement crushing sanctions if Russia does follow through with the invasion.
The economic impact of a renewed war between Russia and Ukraine would be profound, impacting everything from commodity prices and a global supply chain already fraught with issues. The manufacturing sector, for instance, could face serious repercussions from the conflict and “mother of all sanctions” that the US has promised would follow given Russia’s position as a prominent exporter of metals.
As Russia is the leading global exporter of nickel and palladium (and is also a major supplier of aluminum, platinum, steel, and copper), these sanctions would have broad effects on a number of industries:
- automobile production, as palladium is a key component of catalytic converters, copper is used in radiators and electric vehicle production, and aluminum is used in engines
- electronics, as nickel, aluminum, and copper are used in medical equipment, power generation, mobile phones, kitchenware, and other consumer electronics, which have been in especially high demand following the pandemic
- industrial equipment manufacturing, which uses platinum
- others that are extensive users of aluminum, such as can and airplane manufacturers
This is not to mention the supply chain issues that would arise from price spikes related to energy and food, which would also follow an invasion of Ukraine. While NATO has refused Russia’s demand to stop expansion into Eastern countries, it is important to remember that it is not yet a certainty that there will be conflict.
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