new York The US is increasing economic pressure on Russia over the war in Ukraine. As US President Joe Biden announced on Friday, the US wants to suspend normal trade relations with Russia, among other things.
The congress is to approve a corresponding proposal at the beginning of next week. Such a move would pave the way for higher tariffs on Russian goods.
It was only on Tuesday that Washington imposed a complete ban on Russian oil, gas and coal imports. This came on top of the tough sanctions already imposed with the western partners. These were directed against the largest banks, including the Russian central bank.
In addition, several US companies and banks such as McDonald’s, Starbucks, Goldman Sachs and JP Morgan are currently voluntarily withdrawing from Russia. Now tariffs and other trade bans are to follow.
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The USA still does not want to send soldiers to Ukraine or enforce a no-fly zone over Ukraine. They also continue to reject the proposal to hand over Soviet-designed Polish fighter jets to Ukraine and to replace them with US aircraft. But the Biden government wants to increase the economic pressure even further.
With the suspension of normal trade relations, higher tariffs on Russian goods are possible. In addition, Biden wants to completely ban exports of luxury goods to Russia and also the import of Russian vodka, seafood or diamonds. Further sanctions are also planned against Russian oligarchs.
Biden: “Increasing the economic pressure”
Biden stressed that the US is taking these steps together with G7 partners and the EU: “The United States and our allies and partners continue to work closely together to increase economic pressure on Putin and further isolate Russia on the world stage.” , Biden said on Friday.
The United States recently imposed an import ban on Russian oil, gas and coal.
(Photo: AP)
Trade relations between the United States and Russia are not particularly strong: according to the US government, Russia was only the 20th largest supplier of goods to the United States in 2019 and was therefore mainly a supplier of oil, gas, metals and chemicals. However, the White House emphasized that the new sanctions, combined with the measures taken by other western partners, will deal another serious blow to the Russian economy.
>> Read more about the consequences of the raw materials crisis here: Production stops and supply gaps – this is how war drives the economy into crisis
So far, trade relations with Russia have enjoyed trade policy concessions within the framework of the World Trade Organization (WTO), which are to be abolished. To do this, Congress must strip Russia of its “most favored nation” status. This principle stipulates that countries in the WTO should be treated equally when it comes to tariffs and other regulatory measures.
The most favored nation (MFN) principle means that members of the World Trade Organization must give all other members equal access to their market – with a few exceptions. Tariffs can therefore not usually be arbitrarily increased for a specific country.
One of the exceptions is national security. The provisions state that countries can take measures “which they consider 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 it. The Dispute Settlement Committee concluded that it was Russia’s right to invoke this paragraph.
If Congress suspends normal trade relations with Russia, the country would fall into the same category as, say, Cuba or North Korea. Moscow can challenge this measure before the WTO Dispute Settlement Committee.
With agency material
More: Follow the developments in the Ukraine war in the live blog.