Biden hails ‘crushing’ trade restrictions

JOE BIDEN said Russia had been dealt another “crushing blow” to its economy after being stripped of “most favoured nation” trading status.

The move by the G7 and European Union will leave Russia as a trade “pariah” on a par with North Korea or Cuba. The US President also announced a ban on imports of Russian-made diamonds, luxury goods, vodka and caviar.

The move “is going to make it harder for Russia to do business with the United States”, he said.

The European Commission president, Ursula von der Leyen, said the latest measures, which include a ban on Russian iron and steel, would “further isolate Russia and drain the resources it uses to finance this barbaric war”. exports of European luxury goods to Russia have also been blocked.

Coordinated action to cut Russia out of the global trade network compounds an extensive array of sanctions aimed at severing the country’s links with the West. Michael Gasiorek of the Trade Policy Observatory at the University of Sussex, said the move makes Russia a “pariah”, putting it into “the same category of countries such as Cuba and North Korea”. “Revoking or suspending [most favoured nation] status means that now the [G7 and EU] can levy much higher tariffs against Russia, and treat it differently to any other country.”

Simon Evenett of the University of St. Gallen in Switzerland said the introduction of 35pc tariffs could knock 0.9pc off Russian GDP, reduce trade between Russia and the West by 55pc, and destroy about 400,000 jobs in the Russian energy sector.

Tariffs push the cost of Russian goods higher for international buyers, increasing the cost of trade and meaning many will either look elsewhere or demand heavy discounts. Russian international commerce appears to have already buckled, with companies pulling out of the country and suspending trade over fears of violating sanctions.