US President, Joe Biden, has announced a ban on the importation of Russian diamonds, seafood and vodka in the latest response to Russia’s war against Ukraine.
Mr. Biden averred Western allies are planning to revoke Russia’s status as an equal trade partner, paving the way for further economic punishment.
The announcement by the US President came to add up to existing sanctions that have isolated Russia economically since the invasion on Thursday, February 24, 2022. Already, Russia’s currency is facing a collapse, while global firms and brands are also rushing to exit the country.
Russian President, Vladimir Putin, has likened Western sanctions on banks and oligarchs to a declaration of war, and Moscow has also allegedly threatened to nationalise (a major branch of industry or commerce migration from private to state ownership) production plants or factories where work has been suspended.
Mr. Biden explained that the latest steps will be “another crushing blow to the Russian economy”. Under international rules, designating a country as a “most favoured nation” provides reciprocal trade privileges such as lower tariffs including taxes imposed at the border.
The US is coordinating the move to strip Russia of its status along with the European Union and other advanced economies. Mr. Biden disclosed that Canada and Japan would also take similar steps.
G7 Leaders and its sanctions
Leaders of the G7, a group of advanced economies that includes the UK, in a statement, noted that “We remain resolved to isolate Russia further from our economies and the international financial system”.
In the US, Congress is expected to act on the move in order to officially make it effective. But it has already declared itself in favour of the move awaiting an official declaration.
In addition, Mr. Biden revealed that Western allies have planned to cut Russia off from accessing finance from international organisations such as the World Bank and International Monetary Fund (IMF).
Mr. Biden announced that he is also barring US exports of luxury goods to Russia, trade worth about $550m per year, and would further sanction oligarchs and their families.
The White House revealed that the ban on key sectors of Russian imports will deny Mr. Putin more than $1bn in revenue. The amount ($1bn) is just a fraction of the roughly $28bn worth of trade the US and Russia exchanged in 2019.
Stripping Russia of its favoured nation trade status clears the way for higher tariffs on key products such as mineral fuels, fertilisers and metals.
“We’re going to continue to squeeze Putin,” Mr Biden said, pointing out that“He is the aggressor and… must pay the price”.
In the phase of these times, economists have also cautioned that the sanctions will throw Russia into a severe economic recession this year. However, it is not clear whether the economic disarray on Russia’s economy has by far, altered Mr. Putin’s military ambitions.
When will the invasion stop?
At a press conference on Thursday, March 10, 2022, White House Spokeswoman, Jen Psaki, responded to a question suggesting to know when the weight of the sanctions might lead to a change in Mr. Putin’s actions.
“Our objective of course is to bring an end to this conflict. In terms of when that will happen, I’m unfortunately not in the mind of President Putin… When it will change his calculus, I can’t give a prediction of that.”White House Spokeswoman, Jen Psaki