President Joe Biden announced Friday that the United States, along with Canada, France, Germany, Italy, Japan, the United Kingdom and the European Union, will revoke Russia’s Most-Favored-Nation status and impose additional economic sanctions to further isolate that country from the global economy and hold President Vladimir Putin accountable for his unprovoked war against Ukraine.
The joint action revoking the MFN treatment of Russian products by the world’s largest economies, effectively denies Russia the benefits of membership at the World Trade Organization, according to a statement issued by U.S. Trade Representative Katherine Tai.
Tai noted that Congress has already shown bipartisan commitment to quickly pass legislation that would revoke Russia’s Permanent Normal Trade Relations status, the specific U.S. legal designation of MFN. She also indicated that USTR would “continue to partner with other WTO Members to further isolate and ostracize Russia in multilateral institutions.”
In a joint statement describing the further actions being taken by the G7 group of nations, leaders said they welcomed “the ongoing preparation of a statement by a broad coalition of WTO members” announcing their revocation of Russia’s MFN status
Additional trade and economic measures announced by the White House include:
- Banning the export of luxury goods to Russia and Belarus, such as expensive vehicles, antiques, watches, apparel, alcohol, jewelry, etc. (as detailed here) that are “frequently purchased by Russian elites.”
- Banning U.S. import of goods from several signature sectors of Russia’s economy; including seafood, spirits/vodka, and non-industrial diamonds.
- Denying borrowing privileges at multilateral financial institutions.
- Implementing full blocking sanctions on additional Russian elites and their family members.
- Providing new guidance by the Department of Treasury to thwart sanctions evasion, including through virtual or crypto currency.
- Creating the Authority to ban new investment in any sector of the Russian Federation economy.
According to a White House Fact Sheet, the ban on imports from signature sectors of the Russian economy will deny Russia more than $1 billion in export revenues and roughly $550 million per year from the luxury goods restrictions.
In 2021, the United States imported about $29.7 billion from Russia. If the U.S. were to set a similar tariff to that recently imposed by Canada when it suspended MFN status for Russia, it has been estimated that U.S. importers would have to pay about $10.4 billion in additional duties.