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Biden set to call for end of Russia’s preferred trade status
Ukraine war

Biden set to call for end of Russia’s preferred trade status

2 min. 11.03.2022 From our online archive
Suspending normal trade relations would allow US to hit Russia with significantly higher tariffs
Residents evacuate the city of Irpin, north of Kyiv
Residents evacuate the city of Irpin, north of Kyiv
Photo credit: AFP

US President Joe Biden on Friday is set to call for an end of normal trade relations with Russia, clearing the way for increased tariffs on Russian imports, according to people familiar with the matter.

His announcement to revoke the trade privileges will come alongside the Group of Seven nations and European Union leaders, the people said.

The president can’t unilaterally change Russia’s trade status because that authority lies with Congress, where Democratic and Republican lawmakers have called for the revocation.

Suspending normal trade relations with the US, which other countries call most favoured nation status, would put Russia in the company of countries like Cuba and North Korea. It would allow the US to hit Russia with significantly higher tariffs than it applies to other World Trade Organization members, which has as a core principle non-discrimination among members and treating all members equally.

Just like the US, the other countries calling for the repeal over Russia’s invasion of Ukraine will go through their own processes, the people said.

Biden is scheduled to discuss “actions to continue to hold Russia accountable” including the trade preferences announcement at 10:15 on Friday morning, according to the White House.

The European Union said last week that it’s seeking to remove Russia’s most-favoured nation status, and Canada withdrew the designation for Russia.

Leaders in the House and Senate have pushed for the repeal of the preferential trade relations but earlier this week, the provision was removed from a House bill banning Russian energy imports. 

The Biden administration has worked with allies and made Congress aware of those conversations, but lawmakers criticised the White House for asking that the provision be struck as those talks were ongoing.

On Thursday night, Senator Rob Portman, an Ohio Republican and a former US trade representative, said he has a bill with Ben Cardin, a Maryland Democrat, to revoke Russia’s trade status, adding that it’s important Biden also has allies following suit.

“It’s much more effective if they all do it,” Portman said in an interview at the Capitol. “For us it’s not a big deal but for Europe it’s huge. And it’s the right thing to do. Access to our market is a privilege, not a right.” 

Russia is far more dependent on the EU than the US, selling about one-third of its exports to the bloc, versus just 5% to the US in 2020, according to International Monetary Fund data compiled by Bloomberg

©2022 Bloomberg L.P.

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