How Could The Crisis In Ukraine Impact Our Wallets?
MINNEAPOLIS (WCCO) -- The economic ripple effect from the escalating conflict between Ukraine and Russia is growing.
How could the crisis in Ukraine impact our wallets? And what about local companies that do business in that region? Good Question.
It started at the gas pump, with prices ticking up, and has continued onto Wall Street, where the stock market went down.
Both are part of the first wave of ripples from the escalating tension in Ukraine -- with potentially more waves to follow as Russian troops make their way into the eastern part of the country.
Timothy Kehoe is an economics professor at the University of Minnesota.
"This is just gonna add to the uncertainty," Kehoe said.
He says the conflict has the potential to make inflation worse. That means paying even more to fill up your car or shop at the grocery store.
Russia and Ukraine are large agricultural exporters to Europe and Asia. Any disruption could drive global food prices higher, even in the United States. Russia is also a leading producer of critical metals connected to computer chips, meaning cars and electronics could further surge in price.
Kehoe says a full-scale war would make it worse.
"If Europe is embroiled in a big mess with millions of refugees and violence and disruption of trade, that's gonna have an effect on the world economy," he said.
Minnesota doesn't have the strongest trade relationship with the two countries. When it comes to exports, Russia ranks 39th, and Ukraine 52nd. But there are several Minnesota companies with business in Ukraine, including 3M, Cargill and ADM.
Paul Vaaler is an international business and law professor at the University of Minnesota.
"Nobody really discusses, what do you do about war with your assets? With your plant, property, equipment and your people?" Vaaler said.
He says ensuring staff safety is a priority, which could mean evacuating employees along the Russian border to other parts of Ukraine. He compared it to U.S. businesses on the East Coast preparing for a major hurricane.
"What we do is we batten down the hatches and essentially stop all business and stock up. That's what's going on right now," Vaaler said.
All of this is coming at a time when the U.S. economy -- and much of the world -- is trying to rebuild amid the pandemic
"This Ukrainian situation could throw a big wrench into that," Kehoe said.