President Obama announced new, tougher sanctions against Russia on Tuesday, as Western nations ramped up pressure on Russian President Vladimir Putin in the wake of the downing of a passenger jet in Ukraine.

From the South Lawn of the White House, Obama said that the U.S would extend sanctions to major sectors of the Russian economy and three Russian, state-controlled banks.

“The U.S. is imposing new sanctions in key sectors of the Russian economy: energy, arms and finance,” Obama said.

“Today, Russia is once again isolating itself from the international community,” he added, saying the penalties would have "even bigger bite" because they were developed in coordination with European partners.

Obama said the new sanctions were developed partly because Russia blocked the investigation into the downing of the Malaysia Airlines passenger jet.

“Russia and its proxies in Ukraine have failed to cooperate with the investigation,” Obama said. “They have continued to shoot down Ukrainian aircraft in the region.”

The Obama administration had previously resisted such wide-ranging sanctions, as its European partners feared that punishing Russia would hurt their own economies. But after nearly 300 airline passengers and crew members were shot down in Ukraine, European nations said stronger sanctions were needed to force Putin to dial down tensions along Russia’s border.

In addition to the sectoral sanctions, the administration issued new penalties against three state-owned banks, the Bank of Moscow, the Russian Agricultural Bank and VTB Bank.

The latest round of sanctions represents a clear escalation in the showdown between Western nations and Putin — but Obama cautioned against drawing a historical parallel to previous U.S.-Russian tensions.

“This is not a new cold war,” Obama said, before traveling to Kansas City, Mo., for an economic event. “What it is, is a very specific issue related to Russia’s unwillingness to recognize that Ukraine can chart its own path.”

The question now becomes how Putin responds. European nations will feel the impact of the sanctions far more directly than the United States, and Russia could choose to retaliate by cutting off gas supplies to Germany and other major world powers.

Though the Russian economy has been damaged, Putin’s popularity at home has soared as Russia becomes more aggressive in Ukraine.

The White House said Obama crafted the sanctions package in coordination with German Chancellor Angela Merkel, British Prime Minister David Cameron, French President Francois Hollande and Italian Prime Minister Mateo Renzi.

Earlier Tuesday, the European Union said the sanctions would “limit access to EU capital markets for Russian state-owned financial institutions and impose an embargo on trade in arms."

The Obama administration also accused the Russian government of violating a major arms control treaty by testing long-range missiles.

Senior White House officials said additional sanctions were possible if Putin does not change course in Ukraine.

“We always have additional targets we could add to these sanctions,” a senior administration official told reporters, saying the president wanted to send an “immediate signal to Russia.”

This article was posted at 3:54 p.m. and has since been updated.