U.S. downgrades trade status with Russia in response to Ukrainian invasion
by Associated Press
Canada was the first major U.S. ally to remove most favoured nation status for Russia last week.
President Joe Biden announced on Mar. 11 that the U.S. will dramatically downgrade its trade status with Russia as punishment for its invasion of Ukraine and also ban imports of Russian seafood, alcohol and diamonds.
The broad trade shift, which revokes the “most favored nation” status for Russia, is being taken in coordination with the European Union and Group of Seven countries.
“The free world is coming together to confront Putin,” Biden said from the Roosevelt Room of the White House. He also said countries were adding new names to a list of Russian oligarchs who are facing sanctions, and the U.S. is cutting the flow of high-end American products such as expensive watches, cars and clothing.
“We’re banning the export of luxury goods to Russia,” he said.
Biden said there would be further retaliation if Ukraine is targeted with chemical weapons, a possibility that administration officials have warned about in recent days.
“Russia would pay a severe price if they used chemical weapons,” he said.
Stripping most favored nation status from Russia would allow the U.S. and allies to impose higher tariffs on some Russian imports, increasing the isolation of the Russian economy.
Biden’s changes on Russia’s trade status come as bipartisan pressure has been building in Washington to revoke what is formally known as “permanent normal trade relations” with Russia. Ukrainian President Volodymyr Zelenskyy pressed the U.S. and allies to take the action against Russia in remarks to Congress over the weekend. It follows days after the Biden moved to ban imports of Russian oil and gas products.
House Speaker Nancy Pelosi, D-Calif., said lawmakers would pass legislation to formalize the trade downgrade.
“Putin’s premeditated, unprovoked war is an attack on the Ukrainian people and an attack on democracy — and the House remains steadfast in our commitment to partnering with President Biden and our allies to level swift, severe punishment and stand with the Ukrainian people,” she said.
This week’s moves are the latest in a series of sanctions aimed at crippling the Russian economy and a sign that the U.S. and its allies will continue to use their financial heft to retaliate against Russian President Vladimir Putin. The other measures include the freezing of central bank assets, limits on exports and sanctions against Russian oligarchs and their families. These financial tools have led to the Russian ruble losing 76% of its value against the U.S. dollar over the past month, which has caused destructive inflation that could erode Putin’s ability to wage a prolonged war in Ukraine.
Russia provided less than 1% of U.S. vodka imports in December, according to the Distilled Spirits Council of the United States, and less than 2% of U.S. seafood imports by volume, according to federal statistics.
Because Russian imports into the U.S. are primarily natural resources, they would generally face little to no increase in their tariffs because of the lost status, Ed Gresser of the Progressive Policy Institute in Washington, said in an online post.
Canada was the first major U.S. ally to remove most favoured nation status for Russia last week.
