It’s Official: U.S. Joins G7 and European Union in Moving to Revoke Russia’s “Favored Nation” Trade Status
It’s the latest step in the ongoing effort to hold Russia accountable for its unprovoked invasion of Ukraine. The U.S. will also work to deny Russia the ability to borrow from the World Bank and International Monetary Fund.
The White House announced on Friday that the United States, in concert with the G7 and European Union (EU) allies, will work to revoke Russia’s favorable trade relations status, which President Biden said would deal “another crushing blow to the Russian economy.”
Technically, Congress must vote to revoke Russia’s Permanent Normal Trade Relations (PNTR) status — but that isn’t expected to be an issue, given that congressional leaders already have announced an agreement to do just that. Speaker Nancy Pelosi said on Friday that the House would hold a vote to formalize the revocation next week.
“Many issues divide us in Washington, but standing for democracy in Ukraine, punishing Russia’s aggression, should not be one of those issues,” Biden said. “The free world is coming together to confront Putin. Our two parties here at home are leading the way.”
Biden specifically thanked the leaders of both parties — Pelosi, House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Chuck Schumer (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.) for their efforts. He also offered thanks to Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Ranking Member Mike Crapo (R-Idaho), House Ways and Means Committee Chairman Richard Neal (D-Mass.), and Ranking Member Kevin Brady (R-Texas), who worked on the agreement.
The president noted that while Congress was ready to revoke Russia’s PNTR status earlier this week, he asked Pelosi to wait until other nations agreed to join the effort.
“Unity among our allies is critically important, as you all know, from my perspective at least,” Biden said, adding that the countries moving to revoke Russia’s favored trade relations make up half the world’s economy.
PNTR is a legal status that allows a country to have free trade with the United States, meaning that its imports are subject to low tariffs and face few trade barriers. The United States granted Russia PNTR status in 2012, when it joined the WTO.
Once Russia’s PNTR is revoked, tariffs on Russian imports are expected to rise from 3% currently to 33%, according to The New York Times.
The United States will take additional action to isolate Russia economically, Biden said on Friday, including working alongside the G7 and EU to ensure that Russia will no longer be able to borrow money from the International Monetary Fund (IMF) or World Bank.
“Putin must pay the price,” Biden said. “He cannot pursue a war that threatens the very foundations — which he is doing — the very foundations of international peace and stability and then ask for financial help from the international community.”
The president also issued an executive order banning the export of luxury goods to Russia, including things like high-end watches, luxury vehicles, alcohol, and jewelry, an export value of $550 million a year. That order also bans the import of “signature sectors of Russia’s economy,” including seafood, vodka, and non-industrial diamonds, which the White House said will “deny Russia more than $1 billion in export revenues and ensure U.S. citizens are not underwriting Putin’s war.”