(Update 10:05 am) - A Friday Executive Order from President Biden bans the exportation, sale, or supply of US dollar denominated banknotes to Russia to either "the Government of the Russian Federation" or "any person located in the Russian Federation."
* * *
(Update 10:45 am) - President Biden called for an end to normal trade relations with Russia, clearing the way for increased import tariffs, and announced a ban on Russian-made vodka and caviar. Revoking the trading status “is going to make it harder for Russia to do business with the United States,” Biden said in remarks at the White House, adding that it would “be another crushing blow to the Russian economy.”
While the president can’t unilaterally change Russia’s trade status because that authority lies with Congress, House Speaker Nancy Pelosi said the House would consider legislation next week revoking Russia’s trade status, a move that has support from both Democratic and Republican lawmakers. If Congress passes the legislation, Russia would join Cuba and North Korea as the only countries without the status. The U.S. effort is happening in concert with European Union and Group of Seven nations, Biden said.
Biden also announced Friday that the U.S. is banning imports of Russian alcohol and seafood, a move aimed at targeting goods closely associated with Russia like caviar and vodka. The U.S. imports around $24.1 million in beverages, spirits and vinegar annually, with most Russian-branded vodkas produced in other nations. But the U.S. imported $1.2 billion in seafood last year.
The U.S. will also ban the import of diamonds and other luxury goods, Biden said.
Suspending normal trade relations, which other countries call most-favored-nation status, would allow the U.S. to hit Russia with significantly higher tariffs than it applies to other World Trade Organization members. It would also lead to sharply higher prices for such goods from alternative sources. The WTO has as a core principle non-discrimination among members and treating all members equally.
U.S. allies have made similar moves. The EU said last week that it’s seeking to remove Russia’s most-favored nation status, and Canada withdrew the designation for Russia. As Bloomberg notes, Russia is far more dependent on the EU than the U.S., selling about one-third of its exports to the bloc, versus just 5% to the U.S. in 2020, according to International Monetary Fund data compiled by Bloomberg.
Leaders in the House and Senate have pushed for the repeal of the preferential trade relations but earlier this week, the provision was removed from a House bill banning Russian energy imports.
* * *
Having tried to shift the narrative to blaming Putin for all that ails the Democratic party's poor standings with the American public, President Biden is set to announce more actions this morning to further isolate Russia economically from the rest of the world (except of course, the 2.7 billion people living in China and India).
FOX News White House correspondent Peter Doocy to WH press secretary Jen Psaki at Thursday's briefing:
"Are you guys going to start blaming Putin for everything until the midterms? [...] Last month, the statement didn't mention the Putin Price Hike. It mentioned inflation because of the pandemic."
Even The Wall Street Journal is calling the Biden admin out for blame-scaping Putin for 'inflation'...
Inflation keeps rising, and working Americans are paying the price in falling real incomes. That’s the bad news from Thursday’s consumer-price index report for February, and the White House can’t blame Vladimir Putin for this one, though it’s trying.
But we are more than confident, the president will use this morning's address to reinforce that exact narrative.
The Associated Press reports that the U.S. will move to revoke “most favored nation” trade status for Russia over its invasion of Ukraine. The move would be in conjunction with the European Union and the Group of Seven countries.
Stripping the most favored nation status from Russia would allow the U.S. and allies to impose higher tariffs on some Russian imports, increasing the isolation of the Russian economy in retaliation for the invasion.
The Wall Street Journal reports that the US is expected to ban Russian imports of alcohol and seafood entirely.
Despite these initiatives, Russia might not be impacted much by the boycott.
Only around 1.2 percent of all vodka imports into the United States in the first half of 2021 came from Russia, according to data from the Distilled Spirits Council of the United States.
The most popular vodka brands sold in the United States like Smirnoff, Svedka, New Amsterdam, Tito’s, Absolut, Ciroc, and SKYY, are made either domestically or in European countries like the UK, France, and Sweden.
The White House said the actions would “continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine.”
And when those tariffs hit - and send prices even higher - you know who Biden will blame...
Watch Live (due to start at 1015ET):