US bans Russian seafood, diamonds and vodka while revoking ‘Most Favoured Nation’ trade status: ‘Another crushing blow’

Mr Biden’s announcement puts Russia in the same category as Cuba and North Korea in terms of trade with America

Nearly 10 years after the United States granted Permanent Normalised Trade Relations to Russia when it joined the World Trade Organisation, president Joe Biden said he and the G7 were taking steps to revoke that status as part of another round of actions to punish Russia for its unprovoked invasion of Ukraine.

“As 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 on the global stage,” said Mr Biden, who delivered his remarks from the White House’s Roosevelt Room.

Mr Biden said he was joining other allies, including the G7 countries of Canada, France, Germany, Italy, Japan, and the United Kingdom, plus Nato and the European Union, in revoking Russia’s Most Favoured Trade status.

In a joint statement released shortly after Mr Biden concluded his remarks, the G7 heads of government said they were “united” in their “determination” to hold Mr Putin “and his regime accountable” for the invasion of Ukraine, which they called an “unjustified and unprovoked war that has already isolated Russia in the world”.

They added that revoking Russia’s preferential trade treatment would deny Mr Putin’s government the “important benefits” of World Trade Organisation membership by preventing Russian products from receiving preferred treatment in G7 economies, and said a “broad coalition” of WTO members were also preparing a statement to announce similar actions.

Permanent Normalised Trade Relations (PNTR) – formerly known as Most Favoured Nation status under US law until 1998 – is normally accorded to all World Trade Organisation members, and entitles countries to certain preferable treatment, such as reduced tariffs on imported goods.

The president said revoking Russia’s PNTR status would “make it harder for Russia to do business” with the US, but stressed that taking that step in concert with the G7, Nato and the EU – countries which comprise “half the global economy” – would be “another crushing blow” to a Russian economy he said is “already suffering very badly” under the weight of sanctions imposed since the invasion began.

Mr Biden also thanked congressional leaders, including house speaker Nancy Pelosi, senate majority leader Chuck Schumer, and senate minority leader Mitch McConnell.

“Issues divide us in Washington, but standing for democracy in Ukraine ... should not be one of those issues – the free world is coming together to confront Putin and two parties here at home are leading the way with that bipartisan cooperation,” Mr Biden said, adding that he was looking forward to signing the legislation that would enable him to revoke Russia’s PNTR status.

Additionally, Mr Biden said the US was taking “further steps” to punish Russia by banning the import of goods from “signature sectors” of Russia’s economy – including seafood, vodka and diamonds – and prohibiting the export of luxury goods to Russia from the US.

He added that the US would join the rest of the Group of Seven in seeking to deny Russia the ability to borrow funds from “leading multilateral institutions” such as the International Monetary Fund and World Bank, and in adding more names to the list of sanctioned Russian oligarchs and “increasing coordination” among G7 nations to “target and capture their ill-gotten gains”.

“You cannot pursue or threaten ... the very foundations of international peace and stability, and then ask for financial help from the international community,” he said.

While Mr Biden described the measures announced on Friday as the “latest steps” his administration and US allies were taking, he said they would not be the last to target Russia and Mr Putin.

He predicted that the latest actions taken against Russia would “hit Putin harder” because they were rolled out “in unison” with “our closest allies and partners”, and said the “totality” of sanctions levied against Russia is already “crushing” the Russian economy.

“We will not let autocrats and would-be emperors dictate the direction of the world. Democracies are rising to meet this moment, rallying the world to the side of peace and the side of security,” he said. “We’re showing our strength and we will not falter.”