United States bans iconic Russian imports

President Joe Biden said he would ban imports of Russian vodka, caviar and diamonds and called on U.S. lawmakers to join western allies in revoking the country's preferential trade status following the Ukraine invasion.

Downgrading Russia's trade 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.”

The president can't unilaterally remove what's known as “permanent normal trade relations” status for Russia because that authority lies with Congress.

House Speaker Nancy Pelosi said the House would consider legislation next week to revoke the designation, a move that has support from both Democratic and Republican lawmakers.

Biden's signature on the bill would clear the way for increased import tariffs, and Russia would join Cuba and North Korea as the only countries in the world without preferential trade status in the U.S. The U.S. effort is happening in concert with European Union and Group of Seven nations, Biden said.

The G7 issued a statement saying the group would also work “to prevent Russia from obtaining financing from the leading multilateral financial institutions, including the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development.”

Biden also announced Friday that the U.S. is banning imports of Russian alcohol and seafood, targeting iconic goods from the country such as vodka and caviar.

The U.S. imported about US$24.1 million in beverages, spirits and vinegar from Russia last year, though most Russian-branded vodkas are produced in other nations. But the U.S. imported US$1.2 billion in seafood from the country in 2021.

Total U.S. alcohol imports in 2021 were US$729 million, while seafood imports totalled US$4.9 billion, according to data compiled by Bloomberg.

The import of non-industrial diamonds from Russia also will be banned, and the U.S. will bar exports of luxury goods to Russia, Biden said.

“We're also going to make it harder for them to buy high-end products manufactured in our country,” he said.

American luxury goods covered by the prohibition include some brands of spirits, tobacco, clothing, jewelry, vehicles and antiques, according to the White House.

Suspending normal trade relations, which other countries call most-favoured-nation status, would allow the U.S. to hit Russia with significantly higher tariffs than it applies to other World Trade Organization members.

U.S. allies have made similar moves. The EU said last week that it's seeking to remove Russia's most-favoured nation status, and Canada already withdrew the designation for Russia.

Russia is far more dependent on the EU for trade than the U.S., selling about one-third of its exports to the bloc, versus just five per cent to the U.S. in 2020, according to IMF data compiled by Bloomberg.

We're also going to make it harder for them to buy high-end products manufactured in our country.