China Has to Be Part of the Solution to the Ukrainian War, Steven Mnuchin Says

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Former Treasury Secretary Steven Mnuchin at the 2022 Milken Institute Global Conference in Beverly Hills, Calif.

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Patrick T. Fallon/AFP via Getty Images

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LOS ANGELES—Former Secretary of Treasury Steven Mnuchin called Russia’s invasion of Ukraine “the most dangerous situation we’ve been in since World War II” and said China has to assist in de-escalating tensions.

“We need to have an exit strategy,” said former Mnuchin at a Milken Institute Global Conference panel in Beverly Hills, Calf., earlier this week. “We need to find an exit from this for both sides. The risk of escalation is quite significant.”

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Western countries have imposed a series of economic sanctions on Russia and the European Union is considering an embargo on Russian oil imports. A ban on Russian oil won’t be easy for Europe’s economy: Crude oil and natural gas from Russia account for a significant share of the region’s energy use.

“It’s a lesson learned, it’s embarrassing that it took a war for us to wake up to the fact that a strategic mistake has been made—the insane increase in energy dependency of my country,” said Peter Beyer, parliament member of German Bundestates, at the panel.

Europe and the US need a long-term national security energy policy, Mnuchin said, maybe not overnight, but over the next 12 to 24 months. “Two years ago, Germany and the rest of Europe didn’t want to hear about this. It was a major issue of contention with the US They’ve moved considerably.”

Still, Mnuchin thinks sanctions alone aren’t going to stop the war. He said the West needs to think about how to build a new geopolitical order under the rising threat of Russia. “We need to create an offramp,” he said. “Whatever we do, we’re not going to go back to the world as it was before.”

The West should not make the conflict about autocracy versus democracy, he said. Instead, the US and Europe need to rebuild their relationships in the Middle East and with China, when necessary. “China has to be part of the solution here,” he said. “I think that President Xi may be one of the few people that has influence on Putin.”

Beyer didn’t agree with Mnuchin’s vision. “It would be a strategic mistake to think we can negotiate our way out of the situation,” he said, adding that he doesn’t see a future where Putin would be a negotiating partner with the West and that China shouldn’t play a role in such talks. “China is watching, Putin and Xi Jin Ping are testing the West to see how we would behave,” Beyer said.

The West’s response to Russia so far—whether it’s sanctions or military aid to Ukraine—has been “too little and too late,” Beyer said. “The decision making is taking way too long, and that’s caused prolongation of the war,” said Beyer. “We need to increase our sanctions much quicker and much more forcefully. The time of diplomatic talks is over.”

It might be difficult to permanently resolve the conflict with Putin still in power, said Mikhail Khodorkovsky, an exiled Russian oligarch that was put in jail for 10 years on financial charges from Russian authorities who was also on the panel. He was later released and founded the Russian Anti-War Committee and Open Russia, political organizations that advocate democracy and human rights.

“The current war can be brought to a temporary halt with Putin around, but the long-term conflict between the West and Russia won’t end,” said Khodorkovsky.

Write to Evie Liu at [email protected]

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Credit: www.marketwatch.com /

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