By Erik Wasson - 03/19/14 12:00 PM EDT
Hagel, CEOs huddle amid sanctions fears
Defense Secretary Chuck HagelChuck HagelHagel says NATO deployment could spark a new Cold War with Russia Overnight Defense: House panel unveils 5B defense spending bill Hagel to next president: We need to sit down with Putin MORE is meeting with leaders of major U.S. companies Wednesday as worry builds in the U.S. business community over sanctions on Russia in response to the Ukraine crisis. [WATCH VIDEO]
Hagel will meet with chief executives from the Business Roundtable (BRT).
"Secretary Hagel is speaking to the Business Roundtable today about the United States defense strategy and our recent budget submission. We expect there will also be a discussion about world affairs to include the situation in Ukraine and the rebalance to the Asia-Pacific, among other topics,” Pentagon spokesman Carl Woog said.
Hagel is standing in for Vice President Biden, who is traveling in Europe to coordinate the allied response to Russia’s annexation of the Crimea region of Ukraine.
Later in the day, chief executives will meet with U.S. Trade Representative Michael FromanMichael FromanOvernight Finance: GOP faces dilemma on spending bills | CEOs push Congress on tax rules | Trump talks energy Obama administration strikes deal on TPP data storage White House developing legislative strategy to pass Pacific trade deal MORE. The main purpose of that meeting is to discuss trade agreements under negotiation with Pacific Rim nations and the European Union, but sanctions are also expected to be raised.
The Obama administration on Monday froze the assets of 11 Russian and Ukrainian officials in connection with the crisis, but Obama has held off on seeking wider sanctions powers, such as those applied on Iran.
Iran sanctions forbid trade and punish companies doing business with Iran by blocking access to the U.S. banking system.
Business is worried about the fraying of ties with Russia, the extent of the U.S. response and possible Russian economic retaliation. There is about $40 billion in bilateral trade between Russia and the U.S.
“Obviously anybody doing business in Europe is watching the situation very closely and it is a concern,” BRT Chairman Randall Stephenson told reporters on Tuesday ahead of the meeting.
Richard Sawaya, of the National Foreign Trade Council, said the NFTC is urging Congress and administration officials to avoid broad, unilateral sanctions.
“They would almost certainly not have their designed effect and they would have significant blowback for U.S. commercial interests,” he said.
Sawaya said that U.S. trade with Russia is dwarfed by dealings between Russia and the European Union. The U.S. should not get ahead of Europe in imposing sanctions because the only victim would be U.S. business, he argued.
Business Roundtable CEOs will be focusing on ways to advance tax reform, trade and immigration reform during their meeting, said BRT President John Engler.