In the latest response to Russia’s conflict in Ukraine, US President Joe Biden has placed a ban on Russian diamonds, seafood, and vodka imports.
Russia’s position as an equal trading partner will be revoked by the United States, the European Union, and other allies, clearing the door for more economic sanctions.
The steps add to the economic isolation that Russia has faced since the invasion.
Its currency has depreciated, and international companies are fleeing the country.
Western sanctions on banks and oligarchs have been compared by Russian President Vladimir Putin to a declaration of war. Moscow has also threatened to nationalize enterprises or industrial sites if activity has been halted.
On Friday, Western allies vowed more economic punishment.
The European Union said that it will prohibit imports of important Russian iron and steel goods as well as new energy projects, while the United Kingdom imposed penalties on hundreds of Russian lawmakers.
The United States, the European Union, and the United Kingdom have also said that they will halt supplies of luxury items to Russia.
The next actions, according to Mr. Biden, will be “another devastating blow to the Russian economy.”
Designating a country as a “most favoured nation” gives reciprocal trade benefits such as lower tariffs and border fees, according to international standards.
The removal of Russia’s special status allows for increased tariffs on critical products such as mineral fuels, fertilizers, and metals.
Mr. Biden said he was working with the European Union and other advanced countries, such as Canada and Japan, to coordinate the preparations.
In the United States, Congress, which must act before the move can take effect, has already expressed its support for it.
Furthermore, Western allies have stated that they want to deny Russia access to international financial institutions such as the World Bank and the International Monetary Fund.
“Russia cannot break international law and expect to profit from membership in the international economic system,” the G7, which includes the United Kingdom, said in a statement.
According to the White House, the US prohibition on essential Russian imports will cost Mr Putin more than $1 billion in income, while the ban on US luxury goods exports will cost $550 million per year.
This is a small portion of the $28 billion in commerce between the US and Russia in 2019.
Mr. Biden vowed that more steps will be taken, including tougher penalties against oligarchs and their families.
“We’re going to keep putting pressure on Putin,” Biden stated. “He is the aggressor, and he must pay the consequence,” says the narrator.
According to economists, the already imposed sanctions will plunge Russia into a catastrophic economic crisis this year. However, it is unclear if Mr Putin’s military aspirations have changed as a result of the economic crisis.
During a news briefing on Thursday, White House spokesperson Jen Psaki was asked if the severity of the penalties would cause Mr Putin’s behavior to alter.
“Of course, our goal is to put a stop to this war,” she stated. “In terms of when that will happen, I’m regrettably not in President Putin’s head…. I can’t forecast when that will affect his calculus.”