US $51 Trillion and G7 $23 Trillion Support for Ukraine... Considering 'Third-Party Sanctions' on Russian Oil

Large-Scale Financial Support for Ukraine, Pressure on Russia
Also Suggests 'Secondary Boycott' Targeting China and India

[Asia Economy Reporter Hyunwoo Lee] The United States and the Group of Seven (G7) are set to provide massive financial support to Ukraine, amounting to approximately 51 trillion and 23 trillion Korean won respectively. As Russia's invasion of Ukraine enters its third month, this concentrated support is interpreted as a strategy to pressure Russia into abandoning the war. The U.S. government is reportedly also considering a 'secondary boycott (third-party sanctions)' on Russia's major source of funds, oil exports.

On the 19th (local time), the U.S. Senate passed a $40 billion (about 51.12 trillion won) budget bill for aid to Ukraine. The bill includes $20.1 billion for military support, $8 billion for economic aid, and $5 billion for food assistance to Ukraine.

The Senate approved the budget bill containing additional military and humanitarian aid for Ukraine with 86 votes in favor and 11 against. The bill now only awaits President Joe Biden's signature. Chuck Schumer, the U.S. Senate Majority Leader from the Democratic Party, emphasized, "This bill will meet the needs of the Ukrainian people fighting for survival," and added, "We will be able to tell the Ukrainian people that definite help leading them to victory is on the way."

U.S. Treasury Secretary Janet Yellen (front row, left) and other G7 finance ministers are meeting in K?nigswinter, Germany, posing for a group photo. K?nigswinter, Germany - Photo by Reuters and Yonhap News Agency

Separately from the U.S., the Group of Seven (G7) also agreed to provide joint financial support. According to AFP, at the G7 Finance Ministers' meeting held at Petersberg in K?nigswinter, Germany, the finance ministers and central bank governors of the U.S., the U.K., Germany, France, Italy, Japan, and Canada agreed to provide financial aid amounting to $18.4 billion (about 23.276 trillion won) to Ukraine.

The large-scale financial support from the U.S. and G7 is interpreted as an effort to bolster Ukraine's war capacity amid prolonged conflict and tax revenue shortages, while further pressuring Russia. The day before, the Ukrainian government announced that tax revenues for April reached only 60% of the original forecast due to the destruction or blockade of major industrial complexes and export ports caused by the war. May's tax revenues are expected to worsen further, reaching only 45-50% of the forecast.

The U.S. government has indicated that following financial support to Ukraine, it is also considering a secondary boycott on Russian oil. If the secondary boycott is implemented, all countries and companies trading with Russia, including China and India, which purchase large quantities of Russian oil, would be subject to sanctions.

According to CNN, Jennifer Granholm, U.S. Secretary of Energy, stated at a press conference that "What is certain is that the secondary boycott has not been excluded from consideration," adding, "However, we do not want American citizens to suffer from the pressure of high oil prices."