US revokes Russia’s trade status

Putin must absolutely be held accountable for the abhorrent and despicable war crimes he is committing against Ukraine – the images we have seen of that country are simply pure evil.”

Chuck Schumer, Senate Majority Leader.

The United States Congress unanimously approved ending normal trade relations with Moscow and Belarus, in addition to regulating the ban on importing Russian oil, paving the way for the White House to put new pressure on Russian President Vladimir Putin, for his invasion of Ukraine.

The Senate and the House of Representatives approved the revocation of the trade status of Russia and Belarus, in a rare demonstration of strong bipartisan cohesion in recent times.

The measure that repeals the principle of commercial reciprocity of the “most favored nation clause”, allows Western countries to impose sharp increases in tariffs on Russian products.

The bill also requires the United States to request Russia’s suspension from the World Trade Organization (WTO).

As far as the United States is concerned, only two countries are currently excluded from this reciprocity principle: Cuba and North Korea.

Permanent normal trade relations, as the United States calls it, is a key WTO principle known as most-favored-nation status. It requires that countries mutually guarantee equal tariff and regulatory treatment.

According to the US government, countries that achieve most-favored-nation status receive specific trade advantages, such as reduced tariffs on imported goods.

The latest trade sanctions – which also apply to Russia’s ally Belarus – culminated a series of rounds and measures aimed primarily at severing Moscow’s economic and financial ties with the rest of the world.

They have included banning Russian oil imports, seizing the assets of Putin-linked billionaires and freezing the country’s reserves.

Last year, the United States imported from Russia just under 30 billion dollars in products, including 17.5 billion in oil, on which Washington has just imposed a total embargo.

Congress also voted in favor of banning the import of Russian energy, following in the footsteps of President Biden who, in early March, announced an embargo on these materials by decree.

Russian coal embargo

Meanwhile, the European Union (EU) approved an embargo on Russian coal and the closure of European ports to ships from that country, within the framework of the fifth wave of sanctions against Moscow.

The embargo also includes measures restricting exports of high-tech goods to Russia worth 10 billion euros (nearly 11 billion dollars) and freezing the activities of several Russian banks.

This is the first time that the members of the Union approve measures against the Russian energy sector, on which many European countries depend.

The EU imports 45% of its coal from Russia, worth 4 billion euros a year ($4.35 billion).

The embargo will go into effect in early August.

G7 vetoes new investments

The G7, which groups the most advanced economies, also agreed to impose new sanctions against Russia.

The organization’s leaders decided to veto new investments in key sectors of the Russian economy, including the energy sector, further reduce trade and tighten restrictions against Russian banks and state-owned companies in the country, the group said in a statement.

“We will continue to disconnect Russian banks from the world financial system. We have already significantly downgraded Russia’s financial system, by targeting transactions involving the assets of the central bank and a host of other financial institutions,” they noted.

The measures still do not include, for the moment, an embargo on imports of Russian hydrocarbons, claimed by Ukraine, but they intend to “advance” their plans to reduce their dependence in that field, with a “progressive exit from Russian coal and a transition to renewable energy.

The G7 assured that they will work together with international organizations such as the World Food Program to face the food crisis. Russia and Ukraine supply about a third of world sales of wheat and barley.

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