US President Joe Biden announced yesterday (Friday) that the United States will revoke Russia's status as a "most-favored nation" in retaliation for its invasion of Ukraine. This change, which Biden stated was made in coordination with US allies, will allow Washington to impose tariffs on a wide range of Russian goods and increase pressure on an economy that stands on the brink of severe recession.
The American president indicated that the G7 nations will also revoke the "most-favored nation" status granted to Russia and announced the imposition of a US ban on Russian seafood, spirits, and diamonds, as part of the latest steps to punish Moscow for its invasion of Ukraine.
Biden remarked that this move will deliver a "further crushing blow" to Russia as it continues its aggression in Ukraine, describing President Vladimir Putin as an "aggressor" who must "pay the price." He also noted that the United States will add new names to the list of elite Russians under sanctions and will prohibit the export of luxury goods to Russia.
The G7 stated, "We remain determined to further isolate Russia from our economies and the international financial system." Trade constituted about 46% of the Russian economy in 2020, much of which is linked to energy exports that European countries rely on for heating and electricity, making the depth of the impact of these moves on the Russian economy uncertain.
Biden added, "These are the latest steps we are taking, but they are not the last steps we will take." He warned that Russia would pay a "heavy price" if its military uses chemical weapons against Ukraine, expressing US concerns that Russia might be paving the way for a chemical weapons attack without supporting this with evidence.
White House spokesperson Andrew Bates told reporters aboard Air Force One that if Russia targets civilians in Ukraine, "it will be a war crime." The White House, in a separate statement, indicated that Biden will prohibit US investments in Russia outside the energy sector, and that G7 countries will move to prevent Russia from accessing funds from the International Monetary Fund and the World Bank.
These coordinated actions from Washington, London, and other allies come in addition to a range of unprecedented sanctions, export restrictions, and banking limitations aimed at pressuring Putin to end the largest war in Europe since World War II.
These measures have already led to the collapse of the Russian economy, with the International Monetary Fund now predicting a "deep recession" this year. The United States has expanded sanctions against Russia to include executives from sanctioned banks, Russian banker Yuri Kovaltchuk, as well as Russian deputies. The White House stated, "Russia cannot egregiously violate international law and expect to benefit from being part of the international economic system."
Revoking Russia's status will require action from Congress, but members of both the House of Representatives and the Senate have already indicated their support. Administration sources stated that the White House will work with lawmakers to issue legislation to revoke Russia's status. The main US imports from Russia include metals, gemstones, iron, steel, fertilizers, and inorganic chemicals, all of which may face higher tariffs once Congress revokes Russia's most-favored nation status.
