WASHINGTON — President Joe Biden will announce Friday that, along with the European Union and the Group of Seven countries, the U.S. will move to revoke “most favored nation” trade status for Russia over its invasion of Ukraine.
That’s according to 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 U.S. 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 Zelenskyy pressed the U.S. and allies to take the action against Russia in remarks to Congress over the weekend. It follows days after the Biden moved to ban imports of Russian oil and gas products.
Biden, after initially slow-walking congressional efforts to take the trade action against Russia, was set to embrace lawmaker efforts to do just that on Friday.
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.”
The sanctions on imports of Russian oil, gas and coal cut off about 60% of U.S. imports from the country.
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.
U.S. 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 in Washington, D.C., 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.
On Monday, Democrats on the powerful House Ways & Means Committee posted, then removed, an announcement on a bipartisan bill to ban Russian oil imports and slap further trade sanctions on the country, according to an aide, because of pushback from the White House against acting before Biden had coordinated with allies and reached a decision on both matters. The House voted Wednesday on a narrower bill to ban Russian energy imports after Biden instituted the ban by executive order.
Canada was the first major U.S. ally to remove most favored nation status for Russia last week.
Biden’s action was first reported by Bloomberg News.