As summer turns to fall, many of the blue and yellow Ukrainian flags hung back in the spring are beginning to look faded and worn out. That’s how it can be with sanctions as well. A few months ago, the rest of the world was angry and eager to impose punishment on Russia for invading Ukraine, and economic sanctions were the best way to do that. But over time, the enthusiasm for sanctions fades.
It's natural to tire of anything that is difficult, and sanctions have been difficult for many people. By closing off Russian supplies, sanctions have increased fuel prices, and made it more difficult to plan for the future.
Still, we can’t allow ourselves to give up. Even as Ukrainians attempt a counter-offensive to push back Russian invaders, the rest of the world needs to do its part and keep the pressure on by maintaining a strong sanctions regime.
Back in the spring, the White House noted: “More than 600 private sector companies have already left the Russian market. Supply chains in Russia have been severely disrupted. Russia will very likely lose its status as a major economy, and it will continue a long descent into economic, financial, and technological isolation.” However, there was one important metal that somehow managed to avoid being sanctioned.
As Fortune reported recently, “due to a technical gap in EU enforcement, Airbus has been able to continue sourcing titanium parts and forgings from VSMPO to this day under the guise of nonexistent “virtual” quality oversight, with its CEO repeatedly doubling down on the company’s continued Russian sourcing in public comments.”
Let’s unpack that to explain what is going on.
Titanium is a flexible metal that is important in making modern aircraft. VSMPO is a Russian company that provides the metal. Titanium is somewhat rare, and the European plane maker Airbus gets about half of the titanium it uses from Russia.
Airbus has repeatedly lobbied to have titanium left out of the European Union’s sanctions package. “Sanctions on Russian titanium would hardly harm Russia, because they only account for a small part of export revenues there,” an Airbus spokesman claimed. “But they would massively damage the entire aerospace industry across Europe.”
However, it is possible to manufacture jets without Russian titanium. “Boeing suspended all titanium product purchases from Russia early in March at great cost and risk to the company,” Fortune adds. “All of Boeing’s U.S. subsystem suppliers were also forced to discontinue their sourcing from VSMPO.” Yet the American company is still making planes.
The point is that Airbus is taking advantage of the sanctions. Instead of using them to punish Russia for its aggression, it is using them to gain market share at a difficult time. This is especially problematic because Airbus does so much business with the U.S. military. It builds weapon systems and even aircraft for the Pentagon, and yet it clearly doesn’t have the best interests of the democratic West in mind here. The U.S. military needs to be working with contractors it can rely on, not with those who are gaming the system and taking advantage of Russia’s invasion of Ukraine.
“Government policymakers need to work hand-in-hand with top industry leaders to correct unintended competitive disadvantages for U.S. businesses,” as the Fortune piece concludes. “Leveling the playing field ensures American businesses are not penalized for doing the right thing by exiting Russia after Putin’s invasion of Ukraine.” Airbus must pay a price for its scheming, which has already potentially cost too many Ukrainians their lives.