Following the Russian invasion of Ukraine, President Biden declared Friday that the United States would drastically reduce its trade status to Russia and restrict imports of Russian seafood, wine, and diamonds.
With the European Union as well as the Group of Seven countries, the broad trade shift is being taken, which revokes Russia’s “most favored nation” designation.
“The free world is coming together to face Putin,” Vice President Joe Biden declared from the Roosevelt Hall of the White House. According to him, a list of Russian oligarchs who face sanctions expanded. The United States cut off the supply of high-end American goods, including luxury watches, vehicles, and apparel.
Russian imports of high-end items will be banned, he stated.
As administration officials have warned recently, if Ukraine is attacked with chemical weapons, there will be more retaliation, according to Vice President Biden.
“If Russia employed chemical weapons, they would pay a heavy price,” he added.
If the United States and its allies removed Russia’s most-favored-nation designation, they would be able to increase taxes on some Russian imports, further isolating the Russian economy.
After years of bipartisan pressure, Vice President Biden has changed his position on Russia’s trading status, referred to as “permanent normal trade ties” by Washington. President Volodymyr Zelenskyy urged the United States and its allies to take action against Russia in a speech to Congress on Sunday. It comes just a few days after Vice President Joe Biden announced a Russian oil and gas imports restriction.
According to House Speaker Nancy Pelosi, legislation to formalize the trade downgrading is expected to be passed by the House of Representatives.
Putin’s unprovoked war on Ukraine is an attack on the Ukrainian people and on democracy, she said. The House is committed to working with President Biden and our allies to level swift, severe retribution and stand by the Ukrainian people. “
The U.S. and its allies’ latest action to cripple Russia’s economy hints that they will use their financial might to retaliate against Russian President Vladimir Putin. Other measures include freezing the central bank’s assets, restricting exports, and imposing sanctions on Russian oligarchs & their families. Destructive inflation is eroding Putin’s ability to conduct a long-term conflict in Ukraine because of the Russian ruble’s loss of half of its value versus the U.S. dollar in the last month.
The World Trade Organization’s most favored nation status has served as a benchmark for global trade, ensuring that all countries are treated equally. As developing economies, some WTO members have additional benefits. If Russia loses MFN designation from the United States, it joins the ranks of Cuba and North Korea.