U.S impacts of a Ukraine invasion
ST. JOSEPH COUNTY, Ind. - As the conflict continues between Russia and Ukraine continues to escalate, how can it impact the United States? The conflict between Russia and Ukraine is a very complex one.
To get a better idea of how what’s going on in Eastern Europe would affect here at home, experts on the subject tell ABC57 that it could impact everything from oil to agriculture.
“Both Ukraine and Russia are major exporters of grains on the global markets. so a war there were going to decrease the supplies on the global market and increase the prices of wheat, and corn perhaps and a few other items,” Dr. Gabriel Popescu, a political geographer professor at the Indiana University- South Bend said.
Russia’s invasion of Ukraine could have economic repercussions on the global market and, thus indirectly impact the U.S local economy.
The uncertainty between the two countries can potentially increase inflation as gas and food prices are already going up around the world.
Professor Gabriel Popescu, who’s teaching a course on International Political Economy at IUSB said the consequence of an invasion can affect sectors like the financial, energy, agricultural, and oil markets.
Russia is one of the biggest exporters of oils and natural gases in the global market. And most of the pipelines go through Ukraine, this conflict will automatically affect the pipelines and increase oil prices globally.
Since the world is so inter-connected, the conflict can scare off consumers.
“If Russia further invades Ukraine, because any disruption in an international order, it’s leading to volatility, investment strategies and investors have to hedge their bets, so on, most probably were going to see major impacts on the financial markets here,” Dr. Popescu said.
In the past couple of days, we’ve seen gas prices go up. That in part has to do with Russia being one of the biggest exporters of natural gas in the world. But, a Notre Dame International Peace Studies professor, George Lopez said there might be a way around it.
“Gas prices escalate more, maybe you declare a gas tax holiday, and therefore the federal tax and you hope maybe the state taxes on the gallon of gasoline at your local gas station, has already been lowered by almost 20 percent. Which might make up for the increase that we’d see from constraints in the global supply of oil, which will lead barrels of oil a day to increase in price until we get some other suppliers to fill that need,” Kroc Institute for International Peace Studies at Notre Dame Hezburg Professor of International Peace Studies, George Lopez said.
But gas isn’t the only area we could see price increases. We could also see an increase in food prices. Ukraine is second in the world in barley production. It’s also the third-largest producer and fourth-largest exporter of corn in the world. So, this conflict has an impact on the already strained global supply chain. And, we’re already dealing with inflation.
But, IUSB Professor Gabriel Popescu said there may be local opportunities we can look toward.
“Especially locally in states like Indiana. Because the U.S grain producers might step up, in order to make up for the shortage that are going to come from Ukraine and Russia. It’s unclear how much this is going to contribute in lowering the prices in the U.S. But, we expect initially prices are going to increase if the invasion is going on full force,” Dr. Gabriel Popescu, a political geographer professor at the Indiana University- South Bend said.
The U.S and other European nations have leveled harsh economic sanctions against Russia. Professor Lopez at Notre Dame said Russia should start to feel the effects of those in 60 to 90 days and that could force them to reconsider. But, it’s unclear what Wednesday night’s invasion means economically.