White House warns Russia against nationalizing American companies

press secretary Jen Psaki 

White House warns Russia against nationalizing McDonald's, Apple, and other companies withdrawing over Ukraine.

Russian newspaper Izvestia reported Thursday that the Russian government and the Prosecutor General's Office are studying a plan to nationalize the assets of foreign companies that have suspended operations or withdrawn from Russia due to its invasion of Ukraine. The report included nearly 60 companies, including McDonald's, Apple, IKEA, Microsoft, IBM, and Porsche. BBC News reported that "all of these companies have offices, buildings, factories and storefronts in Russia" that the state could "take by force."

White House press secretary Jen Psaki warned the Kremlin last Thursday that "any extralegal decision to seize the assets of the American companies will ultimately lead to more economic pain for Russia." She argued that the nationalization of foreign assets would dispel any confidence that Russia had established because it had frightened all foreign investors into the Bolshevik Revolution.

Earlier this week, Russia embarked on patent theft, decreeing that patent protection should not apply to anyone from a list of "unfriendly" countries.

Meanwhile, President Joe Biden is expected to declare on Friday the removal of Russia's "most favored country" trade status, coordinating with the European Union and G7 nations. This would allow the United States and its allies to impose tariffs on any Russian imports that have not already been blocked by mounting sanctions. Fitch on Wednesday joined two other major credit rating agencies and downgraded Russia's sovereign credit rating to junk, warning of an "imminent" default on Russia's sovereign debt.

"The cuts are signals for investors to move away from Russia." Still, a default "could have far more dire consequences, sending lenders rushing into financial highs and fleeing developing international markets that depend on risk-tolerant investors," The Washington Post reports. . A default would also create "enormous economic hardship for ordinary Russians."

"In the concise term, Russia is a pariah," said George Ball, chairman of Houston-based Sanders Maurice Harris Financial Services. "Whether it is their oil, their economy, or their sovereign debt, no one wants to touch it...People with assets in Russia or deposits in Russia are excited now and for some time to come. They cannot get their hands on money, securities, goods, or services. They are outcasts and in the short term will freeze to death."