The ongoing war in Ukraine is creating “significant risks” to the U.S. economy and is costing American firms billions in lost opportunities, a report by influential economists has warned.
The Center for Freedom and Prosperity paper by Daniel J. Mitchell and Robert O’Quinn also claims that the continuation of the conflict threatens the U.S. dollar’s status as the world’s reserve currency.
Russia and China want to end this so-called “exorbitant privilege” that sees most countries use the dollar for international trade and are using the war and trade tensions to undermine America’s position, the report argues.
The analysis also highlights a staggering $520bn opportunity for American firms in rebuilding Ukraine, alongside reclaiming $100bn in lost energy ventures like ExxonMobil’s Arctic projects.
Conversely, Boeing stands to lose $50-$100bn if sanctions against Russia persist, driving nations toward China’s aviation sector. Meanwhile, continued conflict threatens the dollar’s reserve status, risking a 1% interest rate hike that could add $300 billion to the U.S.’s $30 trillion debt burden.
The paper, which has been sent to the White House, insists that the priority needs to be an end to hostilities to allow the U.S. and its allies to “normalise trade” with both Russia and Ukraine.
“The ongoing conflict is creating significant risks for the U.S. economy—everything from putting at risk the role of the dollar as the world’s reserve currency to significant potential losses for critical industries such as energy and aviation,” the report states.
“Ongoing efforts by the Trump Administration and others to end the war without rewarding Russian aggression are very desirable, most notably because it would put a stop to the death and destruction.
“But an end to hostilities would be economically beneficial as well. Russia and Ukraine could begin to rebuild and grow as more resources get left in the productive sector of the economy instead of being diverted for military use,” it adds.
Trump has made efforts to bring the nearly four year war to an end since returning to office in January. But his most recent attempt to hold a summit in Budapest with Putin fell apart over Russia’s hardline demands on Ukraine, according to a new report.
The U.S. president has also held back from providing Ukraine with Tomahawk missiles despite repeated requests from the country’s leader Volodymyr Zelensky.
A source close to the administration told The Independent: “This is a very significant piece of work and will have an influence on the administration’s thinking.
“The point is that ending the war now is an economic imperative for the US based on trade. Added to that it cannot put the dollar’s status at risk.”
One of the report’s authors has also claimed that the U.K. and Europe should also welcome the benefits to its economy of an end to the conflict.
“The war, and the concomitant sanctions regime, is a collective effort, with Britain imposing asset freezes, trade bans, and visa restrictions under frameworks like the UK’s own Russia (Sanctions) (EU Exit) Regulations 2019,” Mitchell said.
“British companies, from energy giants like BP (which wrote off $25.5bn from its Rosneft stake, the largest single loss cited) to banks and manufacturers, have borne substantial costs.
“The report notes that while US firms lead in aggregate losses at $46 billion, European players like Germany’s Uniper ($22bn) and Finland’s Fortum ($4.1bn) illustrate the transatlantic pain. In the UK, firms exposed to Russian markets—think Shell or financial institutions with Moscow ties—have seen revenues evaporate, echoing the American experience.”
The Independent has asked White House and Downing Street for comment.
