3.10.22
President Joe Biden announced Friday 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. Most favored nation status has been a baseline for global trade, ensuring that countries within the World Trade Organization are treated similarly. Some countries in the WTO have special privileges due to their status as developing economies. Russia would join the ranks of Cuba and North Korea by not having MFN status from the U.S.
