The act of confiscating and transferring the assets of a sovereign country will destabilize financial markets, set a precedent for this type of action to be deployed as a foreign policy tool worldwide, accelerate attempts by emerging economies to shift away from Western currencies and encourage tit-for-tat responses from Russia.
Down the road, China, India or another emerging economy could assume that they’re also on the right side of whatever conflict that could pop up between them and Western countries, (e.g. Taiwan). If Western democracies have previously set a precedent by seizing Russia’s assets, how will these states manage to convince anyone that China or India have no right to confiscate Western holdings if they so wish?
America is running out of friends. Who will trust us if violate agreements and seize the assets of another sovereign country?
BTW, if the REPO Act is signed into law, the legislation would mark the FIRST time the U.S. has seized foreign assets of a country we’re not at war with.
Confiscating the Russian central bank’s foreign-exchange reserves would come with huge economic, financial, and geopolitical unintended consequences.
And what will America’s taxpayers gain?
“And what will America’s taxpayers gain?”
U.S. treasure will not be used to finance the restoration of Ukraine.. Russian reparations will be used.
Well, yes.
If China tries for Taiwan its economic goose is cooked.
That sort of consequence is implicit in the system of the Pax Americana. This has been the case since 1945.
The US used access to its lucrative market (consumer and investment) as an incentive to good behavior. This was a very underappreciated factor in the Cold War. When Europe and Japan recovered, they added their own domestic markets to the global market pool. And as nations reached First World status they joined this pool.
China has felt trapped, under Xi, by these constraints. It cannot easily break out of it because its prosperity came from market access in the first place.