Russia to Be Stripped of 'Most Favored Nation' Status

US, EU, G7 to revoke trade status
By Newser Editors and Wire Services
Posted Mar 11, 2022 3:52 AM CST
US, EU, G7 to Revoke Russia's Trade Status
President Biden speaks at the Democratic National Committee's winter meeting, Thursday, March 10, 2022, in Washington.   (AP Photo/Patrick Semansky)

(Newser) – President Biden will announce Friday that, along with the European Union and the Group of Seven countries, the US will move to revoke "most favored nation" trade status for Russia over its invasion of Ukraine, the AP reports, citing "a source familiar with the matter who spoke on the condition of anonymity to preview the announcement." The person said each country would have to follow its own national processes. Stripping most favored nation status from Russia would allow the US and allies to impose higher tariffs on some Russian imports, increasing the isolation of the Russian economy in retaliation for the invasion.

Biden's move comes as bipartisan pressure has been building in Washington to revoke what is formally known as "permanent normal trade relations" with Russia. Ukrainian President Volodymyr Zelensky pressed the US and allies to take the action against Russia in remarks to Congress over the weekend. The White House said Biden would speak Friday morning to announce "actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine." Most favored nation status requires a country to treat all countries with that status the same. Members of the World Trade Organization share that status, though some countries have special privileges due to their status as developing economies.

Cuba and North Korea do not have MFN status. US tariffs on Russian goods vary, but many of the most important imports are either duty free or would face a negligible increase in such taxes, Ed Gresser of the Progressive Policy Institute said in an online post. That includes imports of uranium, rhodium, and palladium, king crabs, and silver bullion. Instead of the current tariff rate, buyers of Russian goods would pay rates established under the Smoot-Hawley Tariff Act of 1930, which disrupted trade during the Great Depression. Duties would surge from zero to 30% for certain kinds of ammunition and to 10% for some kinds of diamonds.

(Read more Russia-Ukraine conflict stories.)

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