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Biden leads allies in stripping Russia of its most favored nation trading status to punish President Vladmir Putin further for the invasion of Ukraine
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The US bans imports of Russian seafood, alcohol and diamonds, and bars Americans from exporting luxury watches, cars, clothing and other high-end products to Russia
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US also warns Russia not to use chemical arms vs. Ukraine or “pay severe price”
US President Joe Biden, his European and other key allies moved on March 11 to revoke Russia’s most favored nation trade status to punish President Vladmir Putin further for the invasion of Ukraine.
The Biden administration also banned imports of Russian seafood, alcohol and diamonds, and barred exports of luxury watches, cars, clothing and other costly US goods to Russia.
The trading status downgrade allows the Us and its allies to make it harder for Russia to do business with them and allows them to impose higher tariffs on Russian products.
The US Congress is expected to act swiftly to pass legislation to formalize the downgrade and America’s allies are likely to follow suit.
Biden said the US coordinated the action with allies in the North Atlantic Treaty Organization, the European Union and partners in Group of 7, namely, Canada, France, Germany, Italy, Japan, the United Kingdom.
“As Putin continues his merciless assault, the United States and our allies and partners continue to work in lockstep to ramp up the economic pressures on Putin and to further isolate Russia in the global stage,” Biden told reporters at the White House.
The “most favored nation” status calls for similar treatment in trade ties between countries. In the US, it is also known as “permanent normal trade relations” (PNTR). Only North Korea, Cuba and now Russia do not have that status in the US.
“Revoking PNTR for Russia is going to make it harder for Russia to do business with the United States, and doing it in unison with other nations to make up half of the global economy will be another crushing blow to the Russian economy that’s already suffering very badly from our sanctions,” Biden said.
The downgrade won’t have an immediate far-reaching effect on the Russian economy, but, along with other sanctions the United States and its allies have imposed, it adds pressure on Putin to end the invasion, now on its third week.
The British newspaper Independent cited Ed Gresser, director for trade and global markets at the Progressive Policy Institute, as saying in an online post that imports from Russia are mostly natural resources which generally will face little to no tariff increase despite the lost MFN status.
Biden said the US and its allies are going after Russian oligarchs’ assets to punish them for supporting Putin.
“We’re also going to make it harder for them to buy high-end products manufactured in our countries; we’re banning the export of luxury goods to Russia,” the President said. He said these goods include “high end-watches, luxury vehicles, high-end apparel, and jewelry.
Biden has issued an executive order banning the import of seafood, spirits/vodka and non-industrial diamonds from Russia.
“This will deny Russia more than US$1 billion in export revenues and ensure US citizens are not underwriting Putin’s war,” the White House said.
He also warned Russia it would “pay a severe price” if it used chemical weapons against Ukraine. The White House declined to elaborate on what such a response might look like.
