Earlier this morning, President Biden announced that him and Congress will work to revoke Russia’s current trade relations status which will make them the third country to not have a normal relationship with the US, alongside North Korea and Cuba.
Various other countries, such as Canada and those in the European Union, have already moved to revoke Russia’s trade status which will heavily impact millions of dollars of imports to Russia. This move is intended to cut off significant economic support in Russia to reprimand Putin for his attacks on Ukraine. Member nations of NATO and G-7 are also planning to revoke Russia’s status as a driving force to get Putin to end the war in Ukraine.
Biden stated that the US will ban goods from several sectors of Russia’s economy, such as seafood, vodka and diamonds which will deny Russia more than $1 billion in export revenues. He will also issue an executive order ending the exportation of luxury items, including tobacco, clothing, jewelry, cars and antiques, to Russia. Officials are saying that the goal is ultimately to continue hurting the country’s wealthiest people by depriving them of comforts as the US continues to put pressure on those close to Putin.
Additionally, many companies “such as Starbucks, McDonald’s, Hilton Worldwide Hotels, Coca-Cola and PepsiCo. have announced changes to their operations in Russia” as a way to condemn Russia’s actions which will likely have an impact in the near future if Russia continues its attacks. The combination of companies changing their operations and the US revoking trade status will result in increased isolation of the Russian economy and allow the U.S. and allies to impose higher tariffs on some Russian imports.
Instead of current rates, buyers of Russian goods would pay rates under the Smoot-Hawley Tariff Act of 1930. This would be zero for uranium, rhodium, palladium, silver bullion and king crabs. However, the import tax would increase heavily for aluminum, plywood, semi-finished steel and diamonds, and several other products. As a result, buyers of Russian goods and the Russian economy will face a significant change that will disrupt their current conditions.
There is also legislation in the works that would call for expelling Russia from the World Trade Organization. That is a huge gesture because that would require an extensive effort to gain the consent of more than 100 countries which ultimately symbolizes the US’s determination to confront Russia for their inhumane attacks.
This blog post is part of the CIMA Law Group blog. If you are located in Arizona and are seeking legal services, CIMA Law Group specializes in Immigration Law, Criminal Defense, Personal Injury, and Government Relations.
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