By: Real America News Updated 11 Mar 2022, 13: 34 pm EST
The president, Joe Biden, announced this Friday his decision to drastically downgrade his trade status with Russia , with the aim of hindering business between the two countries. In addition, it announced the ban on importing “distinctive” products of the Russian economy such as vodka, diamonds, fish and shellfish, in retaliation for the Russian invasion of Ukraine.
The extensive trade change, which revokes the status of “most favored nation” for Russia , was taken in coordination with the European Union and the countries of the Group of Seven.
“The free world unites to confront Putin,” Biden said during a televised address from the White House this morning.
Biden announced that the G7 countries will work to close any source of financing to Russia from international financial institutions such as the International Monetary Fund (IMF) and the World Bank (WB).
“Putin is the aggressor and he must pay the price for it. You cannot continue to take actions that threaten the foundations of international peace and stability and then ask the international community for financial help,” he said.
What does it mean to withdraw the treatment of “most favored nation”
Stripping Russia of the status of most favored nation would allow the US and its allies impose higher tariffs on some Russian imports, increasing the isolation of its economy.
Despite Biden’s announcement, the withdrawal of the so-called “most favored nation” treatment from Russia must be approved by the US Congress, something that is expected to go ahead with both Democratic and Republican support.
The status favored nation has been a baseline for world trade, ensuring that countries within the World Trade Organization receive similar treatment.
Russia se u would join the ranks of Cuba and North Korea by not having the status.
Instead of the current tariff rate, buyers of Russian products would pay the rates established under the Smoot-Hawley Tariff Act of 1930, which interrupted trade during the Great Depression.
This would still be zero for uranium, rhodium, palladium and silver bullion. But the import tax would skyrocket for raw aluminum, plywood, semi-finished steel and diamonds, among other products.
Biden changes days after Biden moved to ban imports of Russian oil and gas products.
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