Congress votes to strip Russia of ‘most favored nation’ trade status

Congress on Thursday voted to revoke Russia’s “most favored nation” trade status, an economic downgrade that opens the door to damaging new tariffs on Moscow over its invasion of Ukraine.

The House passed the bill in an overwhelming 420-3 vote, sending it to President Joe Biden’s desk. The Senate approved the same version of the legislation in a unanimous 100-0 vote taken earlier on Thursday.

The three members of Congress who opposed the effort to strip Russia’s favored status were Reps. Marjorie Taylor Greene of Georgia, Thomas Massie of Kentucky and Matt Gaetz of Florida, all Republicans who strongly align themselves with former President Donald Trump.

The bill, known as HR 7108, is a formal step to sever normal trade relations with Russia and Belarus — one of the Kremlin’s closest allies — and allow import controls on key products like platinum, chemicals, iron and steel.

The U.S. has already cut its normal trade relationship with Moscow in practice: the Biden administration moved to ban imports of oil, vodka, diamonds and seafood from Russia last month.

“No nation whose military is committing war crimes deserves free-trade status with the United States,” Senate Majority Leader Chuck Schumer, D-N.Y., said on the Senate floor Thursday. “No vile thug like Putin deserves to stand as an equal with the leaders of the free world. He is a menace and a pariah who has ensured his place in history will be one of everlasting shame.”

Most favored nation status ensures that any member of the World Trade Organization receives equal trade treatment from other members and grants each designee immunity from a raft of steep import penalties.

“There are two categories you can be characterized under U.S. law: One gets lower tariffs, and one gets higher,” said Clete Willems, a partner at law firm Akin Gump and former U.S. attorney at the WTO.

“All other WTO members get this lower [tariff] rate — the average is about 2.8%,” he added. “And then for non-MFN, the average is around 20%. And so this legislation will change the tariff treatment of all of those products.”

Congress also voted to codify a promise Biden made last month to ban the import of Russian energy products into the United States. That bill cleared the Senate 100-0, and passed the House 413-9.

Many nations, including the Group of Seven, have promised to work to end the West’s economic relations with Russia as the U.S. and its allies open investigations into what are likely to be deemed war crimes committed by Russian forces in Ukraine.

The Biden administration and its partners have worked to limit the Kremlin’s access to global financing organizations like the International Monetary Fund and the World Bank. The Treasury Department and the Federal Reserve have also worked in tandem to block Russia’s access to…