U.S. threatens use of novel export control to damage Russia’s strategic industries if Moscow invades Ukraine
The Biden administration is threatening to use a novel export control to damage strategic Russian industries, from artificial intelligence and quantum computing to civilian aerospace, if Moscow invades Ukraine, administration officials say.
The weapon, known as the foreign direct product rule, contributed to Huawei suffering its first-ever annual revenue drop, a stunning collapse of nearly 30 percent last year.
The attraction of using the foreign direct product rule derives from the fact that virtually anything electronic these days includes semiconductors, the tiny components on which all modern technology depends, from smartphones to jets to quantum computers — and that there is hardly a semiconductor on the planet that is not made with U.S. tools or designed with U.S. software. And the administration could try to force companies in other countries to stop exporting these types of goods to Russia through this rule.
A year later how is this working? Effective?
During the cold war an exchange student from Poland pointed out they could get almost anything for a price. They say a years production of semiconductors will fit in a shoebox.
Easy to conceal, easy to smuggle. Difficult to control.
Seems to be working, at least somewhat. For example, Russia has been relegated to buying drones from Iran that are about 6-10 years less advanced than the drones being supplied to Ukraine.
But thats probably because Iran had aging munitions they were delighted to sell so they can be replaced with newer equipment. Theres no indication there was a shortage of parts.
A major part of this is whether Russia can afford the chips. Putting Russia into the black market is a limiting factor for Russia.
Even if they get the chips something else has to go.
Russia has been at this for eons and has much experience. To the people the zloty needs only to be accepted within Russia as for bread. Money can be printed at will. It only matters for import/export.
For hard currency Russia sells oil, natural gas, and minerals. In a pinch even gold.
They manage this all the time. Its an advantage of an autocratic government. As long as there is bread on the table dissent is irrelevant.