The US government, in coordination with Western partners, wants to initiate more punitive measures against Russia because of the Ukraine war. US President Joe Biden announced in Washington on Friday that he, among other things, wanted to work with Congress to suspend normal trade relations with Russia. That would open the way for higher tariffs on Russian goods.
It is also planned to ban the export of luxury goods to Russia and ban the import of Russian products such as vodka, seafood and diamonds. In addition, more sanctions will be imposed on the Russian oligarchs. Biden emphasized that the United States is taking these steps together with the G7 partners and the EU.
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As regards trade relations with Russia, trade policy concessions within the framework of the World Trade Organization (WTO) will be abolished. The United States Congress must take action on this. Specifically, Russia will be deprived of “most favored nation” status. This principle stipulates that WTO countries must receive equal treatment when it comes to tariffs and other regulatory measures.
From the perspective of US foreign trade, suspending normal trade relations would put Russia in the same category as, say, Cuba or North Korea. Moscow can challenge this measure before the WTO Dispute Settlement Committee.
Tariffs cannot be arbitrarily increased, except in times of war.
The most favored nation (MFN) principle means that members of the World Trade Organization must give all other members the same access to their market, with some exceptions. Therefore, tariffs generally cannot be arbitrarily increased for a specific country.
One of the exceptions is national security. The provisions state that countries may take such measures “as they deem necessary to protect their essential security interests (…) in time of war or other serious crises in international relations.”
Russia invoked this exact provision a few years ago after restricting the movement of Ukrainian goods through Russia. Ukraine appealed against him. The Dispute Settlement Committee concluded that Russia was entitled to invoke this paragraph.
Now the United States and its partners want to invoke it to suspend trade relations with Russia. Trade relations between the US and Russia are limited: according to the US government, Russia was the 20th largest supplier of goods to the US in 2019 and thus mainly supplied oil and gas, metals and chemicals. However, the White House stressed that, combined with the measures taken by the other Western partners, this would deal another severe blow to the Russian economy.
You can read more about the war against Ukraine on Tagesspiegel Plus:
Since the beginning of the war in Ukraine, the US, in coordination with the EU and other allies, has already imposed very harsh sanctions on Russia, including the largest banks and the Russian central bank. These are already affecting the Russian economy.
Just a few days ago, the US also issued an import ban on oil from Russia. In addition, many American companies are cutting their business with Russia on their own. (dpa)