US vows tough measures against countries violating intl. economic order

In the latest case of saber-rattling, a top US government official has warned that Washington will impose harsh consequences on countries that abuse or violate the international economic order.

The US Treasury Secretary Janet Yellen in her remarks on Tuesday in South Korea said the countries that support Russia's military operation in Ukraine will face the US government's wrath while accusing Moscow of "weaponizing" the economic integration. 

"Economic integration has been weaponized by Russia," she said, calling on world countries to unite in opposition to Russia's offensive in Ukraine and to put a cap on Russian oil as a tool to shrink the country's economy and lower global oil prices.

Yellen attended the Group of 20 finance minister meetings on Indonesia's resort island of Bali and made stops in Tokyo, Japan, and Seoul, South Korea.

On her 11-day visit to Indo-Asia countries, Yellen has been pushing a proposal to control Moscow’s oil price through insurance and financing. The plan aims to keep the Russian oil flowing but at a price just above Russia’s cost of production.

The cap on oil prices will only take place if European countries, UK and Switzerland take part in the plan.

Past oil sanctions have been met with defiance as countries under US sanctions such as Venezuela have found their way to get around the sanctions and withstand the US economic pressure.

Yellen was quoted as saying by Reuters on Monday that the United States is "pushing for increased trade ties with South Korea and other trusted allies to improve the resilience of supply chains, and avert possible manipulation by geopolitical rivals".

Yellen said she plans to discuss the oil price cap proposal with top officials during her stay in Seoul. She further emphasized that the price cap on Russian oil is “one of our most powerful tools” to alleviate the painful leaps in energy and food prices.

On the final leg of her visit to the Indo-Pacific region, LG Chem CEO Hak Cheol Shin hosted Yellen on a tour of LG facilities on Tuesday morning. The company is known for its battery material and petrochemical businesses. 

Yellen said the US seeks to end its “undue dependence” on key goods from China by increasing trade ties with South Korea and other allies to prevent Beijing from cutting off supplies as it has done to other countries.

On Monday, she said the US and South Korea should deepen their trade ties to avoid working with countries such as China.

"We cannot allow countries like China to use their market position in key raw materials, technologies, or products to disrupt our economy or exercise unwanted geopolitical leverage," Yellen said, according to excerpts provided by the Treasury Department.

The world's two largest economies - the US and China - have been locked in a protracted trade war, which has only intensified since 2017.

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