US cuts Russia’s trade status, nyet on alcohol, seafood – Press Enterprise
By ZEKE MILLER, JOSH BOAK and CHRIS MEGERIAN
WASHINGTON (AP) — President Joe Biden announced Friday that the US will slash its trade status with Russia as punishment for its invasion of Ukraine, and will also ban imports of Russian seafood, alcohol and diamonds.
The sweeping trade shift that will strip Russia of its “most favored nation” status is being carried out in coordination with the European Union and Group of Seven countries.
“The free world is coming together to confront Putin,” Biden said from the White House’s Roosevelt Room.
Stripping Russia of most-favoured-nation status would allow the US and its allies to impose higher tariffs on some Russian imports, increasing the isolation of the Russian economy.
Biden’s changes to Russia’s trade status come as bipartisan pressure has built in Washington to end what is formally known as “permanent normal trade relations” with Russia. In a speech to Congress over the weekend, Ukrainian President Volodymyr Zelenskyy urged the United States and its allies to take action against Russia. It follows days after Biden banned the import of Russian oil and gas products.
This week’s moves are the latest for the sanctions that have crippled Russia’s economy and a sign that the US and its allies will continue to use their financial clout to exact revenge on Russian President Vladimir Putin. Other measures include freezing central bank assets, export restrictions and sanctions against Russian oligarchs and their families. These financial instruments have caused the Russian ruble to lose 76% of its value against the US dollar over the past month, causing devastating inflation that could erode Putin’s ability to wage a prolonged war in Ukraine.
Biden hailed lawmakers’ efforts to do just that on Friday, after initially slow attempts by Congress to take the trade measures against Russia.
Previous sanctions on Russian oil, gas and coal imports cut off about 60% of US imports from the country.
Most-favoured-nation status was a basis for world trade to ensure countries were treated equally within the World Trade Organization. Some countries in the WTO have special privileges because of their status as developing countries. Russia would join the ranks of Cuba and North Korea by not having MFN status from the US
The revocation has above all symbolic weight. Because Russian imports to the US are primarily natural resources, they would generally face little or no increase in their tariffs because of the lost status, Ed Gresser of Washington’s Progressive Policy Institute said in an online Contribution.
Instead of the current rate of duty, buyers of Russian goods would pay rates set under the Smoot-Hawley Tariff Act of 1930, which disrupted trade during the Great Depression. For uranium, rhodium, palladium, silver bullion and king crab, this would still be zero. But the import tax would skyrocket on raw aluminum, plywood, semi-finished steel and diamonds, among others.
On Monday, Democrats in the powerful House Ways & Means Committee released an announcement on a bipartisan bill to ban Russian oil imports and impose more trade sanctions on the country, according to an adviser, because the White House pushed back on action before Biden clashed with allies voted and made a decision on both matters. The House of Representatives on Wednesday voted on a narrower bill banning Russian energy imports after Biden introduced the ban via executive order.
Canada became the first major US ally to strip Russia of most-favoured-nation status last week.
Biden’s action was first reported by Bloomberg News.
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