Congress votes to revoke Russia’s ‘most favored nation’ trade status, sends bill to Biden – CNBC

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“No nation whose military is committing war crimes deserves free trade status with the United States,” Senate Majority Leader Chuck Schumer, D-N.Y., said Thursday on the Senate floor. “No vile thug like Putin deserves to stand as an equal with the leaders of the free world. He is a menace and a pariah who has ensured his place in history will be one of everlasting shame.”

Most favored nation status ensures that any member of the World Trade Organization receives equal trade treatment from other members and grants each designee immunity from a raft of steep import penalties.

“There are two categories you can be characterized under U.S. law: One gets lower tariffs, and one gets higher,” said Clete Willems, a partner at law firm Akin Gump and a former U.S. attorney at the WTO.

“All other WTO members get this lower [tariff] rate — the average is about 2.8%,” he added. “And then for non-MFN, the average is around 20%. And so this legislation will change the tariff treatment of all of those products.”

Congress also voted to codify a promise Biden made last month to ban the import of Russian energy products into the United States. That bill cleared the Senate 100-0, and passed the House 413-9.

Many nations, including the Group of Seven, have promised to work to end the West’s economic relations with Russia as the U.S. and its allies open investigations into what are likely to be deemed war crimes committed by Russian forces in Ukraine.

The Biden administration and its partners have worked to limit the Kremlin’s access to global financial organizations like the International Monetary Fund and the World Bank. The Treasury Department and the Federal Reserve have also moved in tandem to block Russia’s access to currencies other than the ruble, as well as target individuals and families close to Russian President Vladimir Putin with sanctions.

Treasury Secretary Janet Yellen says the barrage of economic penalties are designed to dent the ruble, ruin the Russian stock market and otherwise sap Moscow’s economy over time. Through the moves, the U.S. hopes to undermine Putin’s authority in the Russian military and among the country’s wealthy oligarchs.

The most favored nation bill should been considered “additive” and damaging in the context of an international, coordinated effort, attorney Willems said.

“It’s one among many moves that together start to have a real impact on the Russian economy,” he said. “The president will have the authority to raise tariffs on other select products. And the key imports we get from them beyond oil are platinum, chemicals, iron and steel, plywood, some kinds of engines, and titanium.”

Source Article from https://www.cnbc.com/2022/04/07/senate-votes-to-strip-russia-of-most-favored-nation-trade-status.html

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