The United States and its top allies are revoking Russia’s “most favoured nation” status, President Joe Biden has announced, in a move he said aims to punish the Russian government for its invasion of Ukraine.
The decision, announced on Friday, downgrades Russia’s trading status with the US and allows Washington to impose higher tariffs on Russian products.
Biden said it was taken in coordination with NATO allies, the European Union and the G7.
“As [Russian President Vladimir] Putin continues his merciless assault, the United States and our allies and partners continue to work in lockstep to ramp up the economic pressures on Putin and to further isolate Russia in the global stage,” he told reporters.
The “most favoured nation” standard, which calls for similar treatment in trade relations between countries, is the international norm. In the US, “most favoured nation” standing is also known as permanent normal trade relations (PNTR). Only North Korea, Cuba and now Russia do not have that status in the US.
“Revoking PNTR for Russia is going to make it harder for Russia to do business with the United States, and doing it in unison with other nations to make up half of the global economy will be another crushing blow to the Russian economy that’s already suffering very badly from our sanctions,” Biden said.
On Friday, Biden also pledged to continue the push to penalise wealthy Russians with close ties to Putin, saying that the US and its allies are going after their assets.
“We’re also going to make it harder for them to buy high end products manufactured in our countries; we’re banning the export of luxury goods to Russia,” the US president told reporters.
“High end-watches, luxury vehicles, high-end apparel, high-end alcohol, jewelry, and other goods frequently purchased by Russian elites” are some examples, the White House said in a statement.
Under the executive order, the import of seafood, spirits/vodka and non-industrial diamonds from Russia is no longer allowed.
“This will deny Russia more than $1 billion in export revenues and ensure US citizens are not underwriting Putin’s war,” the White House said.
The decree will also lay out the rules under which Americans can invest in any sector of the Russian economy. Previously new investments in the Russian energy sector were banned.
Friday’s announcement comes as the US and its allies ramp up pressure and sanctions on Russia as its forces push to capture major cities across Ukraine. Canada had unilaterally revoked Russia’s “most favoured status”.
Russia launched an all-out invasion of Ukraine on February 24 after a months-long standoff that saw Moscow amass troops near the Ukrainian border as it demanded an end to NATO expansion into former Soviet republics.
Biden banned Russian oil and gas imports earlier this week. And European countries pledged to drastically decrease their dependence on Russian fuel for their energy needs.
In a joint statement later on Friday, the G7 countries of the United States, Germany, Japan, the United Kingdom, France, Italy and Canada confirmed revoking Russia’s “most favoured nation” status and announced additional sanctions on Moscow.
The measures include efforts to “prevent Russia from obtaining financing from the leading multilateral financial institutions, including the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development”.
“Russia cannot grossly violate international law and expect to benefit from being part of the international economic order,” the statement said.
For his part, Biden highlighted steps that the United States is taking to increase support to Ukraine.
Congress passed a major spending bill late on Thursday which includes $13.6bn in emergency aid to Ukraine. Biden said he looks forward to signing the legislation “immediately”.
“We will make sure Ukraine has weapons to defend against the invading Russian force,” Biden said. “We will send money and food and aid to save the Ukrainian people. And I will welcome Ukrainian refugees. We should welcome them here with open arms if they need access.”
Still, the US president reiterated that the US will not get into a military conflict with Russia in Ukraine, amid calls for establishing a NATO-enforced no-fly zone over the country.
“We will not fight a war against Russia in Ukraine,” he said. “Direct confrontation between NATO and Russia is World War Three. Something we must strive to prevent.”
On Thursday, Putin pledged that Russia will overcome Western sanctions. “In the end, this will all lead to an increase in our independence, self-sufficiency and our sovereignty,” he told a televised government meeting.
But Biden said Russia is destined to lose the war in Ukraine.
“We already know Putin’s war against Ukraine will never be a victory,” the US president told reporters on Friday. “He hoped to dominate Ukraine without a fight; he failed. He hoped to fracture European resolve; he failed. He hoped to weaken the transatlantic alliance; he failed… The American people are united and the world is united, and we stand with the people of Ukraine.”