U.S. businesses with exposure in Russia and Ukraine are waiting and watching to see how the tensions between Russia and the U.S. take shape in the coming weeks.
“Obviously, the things that are happening are quite terrible and will affect the business environment,” said Sergio Millian, president of the Russian-American Chamber of Commerce, which represents some 200 companies with economic interests in Russia. “We’re advising our members to make a short pause in investing in Russia and wait to see what Russia and the U.S. do."
Russia is not among the top 15 trading partners
with the U.S., but the U.S. exported just over $11 billion worth of goods, mostly machinery, to Russia in 2013, according the U.S. Census
. Russia, meanwhile, exported nearly $27 billion worth of goods, mostly oil and gas to the U.S.
Several large U.S. corporations such as Boeing, Cargill, General Motors and Exxon have substantial investments in Russia.
Boeing, for example, said they had completed contracts in Russia and the CIS worth $7.5 billion from 1991 to 2013.
According to the Boeing, Russia/CIS will need approximately 1,170 new airplanes of various types valued at nearly $140 billion, over the next 20 years.
According to Doug Alder, a spokesman for Boeing, the company is standing by for the time being.
“We are watching developments closely to determine what impact, if any, there may be to our ongoing business and partnerships in the region,” he wrote in an email. “We won’t speculate on the potential impact of sanctions or any other potential government actions.”
Cargill, a large food processing and agricultural corporation, has been involved in the Ukrainian market for 20 years, according to the company
The company, which supplies Ukrainian farmers with crop protection products, seeds and fertilizers and then purchases the grain and oilseeds produced, also said it was not commenting on the ongoing situation in Ukraine.
Exxon announced earlier in the week it was putting an offshore natural gas project on hold while the political situation there unfolds, but said they were continuing with investments in Russia, including a Black Sea project near Crimea.
“As for the current situation, obviously it’s early days,” Rex Tillerson, Exxon Mobil’s chairman and CEO told the Dallas Morning News
. “There’s been no impact on any activities or plans at this point, nor would we expect there to be any, barring governments taking steps beyond our control.
General Motors did not respond to a request for information.
Meanwhile, the U.S. is still contemplating the use of sanctions that could have a major impact on U.S.-Russian trade.
Earlier in the week, Secretary of State John Kerry tweeted
that the G8 “will not engage with Russia as business as normal” and that “Russia [is] inviting trade isolation.”
Some wonder about how effective sanctions would be.
Alexis Rodzianko, president of the American Chamber of Commerce in Russia told Reuters it was “very unlikely” that Russia was going to be cut off from the world because of the raw materials it supplies, particularly energy.