US Urges G-7 Allies to Consider Sanctions on Russian Palladium and Titanium
The United States has reportedly urged Group of Seven (G-7) allies to consider imposing sanctions on Russian palladium and titanium as the Biden administration explores new strategies to pressure President Vladimir Putin's war effort in Ukraine. A person familiar with the matter revealed that Biden administration officials floated the possibility during a meeting of G-7 deputy finance ministers in Washington on Tuesday. The meeting took place amid the annual gatherings of the International Monetary Fund and the World Bank.
The idea was raised by the US to generate discussion about additional means of constricting the Russian economy, almost three years after the start of Putin’s invasion of Ukraine. Palladium, a key ingredient in computer chips and catalytic converters for automobiles, and titanium, used in applications ranging from aircraft to medical implants, are both critical resources that would be impacted by such sanctions.
However, one major obstacle to these proposed sanctions is Europe’s reliance on these metals. G-7 members Germany, France, and Italy, along with the other 24 members of the European Union, would need to agree on targeting these resources—something they have been hesitant to do in the past. Despite the US already blacklisting Russian titanium, European concerns over potential disruptions to their supply chains and market stability have made similar sanctions unlikely.
Western nations have grappled with the idea of sanctioning Russian metals for some time. In December, the price of palladium surged as much as 12% amid speculation that the metal could be next in line for sanctions after the UK restricted the purchase of certain Russian metals. Earlier this year, both the US and UK imposed trading restrictions on Russian aluminum, copper, and nickel.
Sanctioning titanium would also serve as a response to a recent suggestion by Putin that Russia could restrict the export of commodities like nickel, titanium, and uranium in retaliation for Western sanctions—provided it wouldn't hurt Russia itself. Such a move would put additional pressure on European industries, especially aerospace manufacturers like Airbus, which rely heavily on Russian titanium.
The US continues to import Russian palladium, with Norilsk Nickel—a major Russian mining company—producing about 40% of the global supply, a market share that would be difficult to replace swiftly. For the European Union, supplies of both palladium and titanium from Russia remain critical, particularly for titanium used in aviation.
The US Treasury Department declined to comment on the proposal.
