Western governments of the G7 nations are to strip Russia of its World Trade Organisation ‘most favoured nation’ (MFN) status after its invasion of Ukraine.
The move revokes normal trading relations with Russia and means the imposition of punitive tariffs on Russian trade that will further exclude it from the global economy.
The principle of MFN treatment means that, unless a preferential agreement is in place, the same rate of duty, on the same goods, must be charged to all WTO members equally.
In a joint statement on Friday 11 March, the G7 said a “broad coalition” of WTO members were preparing to revoke important benefits of Russia’s MFN membership.
Russia will now operate under the WTO’s General Tariff, meaning a tariff rate of 35% will now be applicable on virtually all of its exports.
The G7 is made up of the US, UK, Canada, France, Germany, Italy and Japan.
President Joe Biden this afternoon announced that the US was moving to revoke Russia’s MFN status in coordination with allies.
He also said the US was “taking the first steps” to ban imports of Russian luxury goods including vodka, seafood and diamonds.
Revoking Russia’s MFN status would “make it harder for Russia to do business with the United States”.
“Putin is the aggressor and Putin must pay a price,” Biden said.
He added that the US and its allies were targeting an expanded list of Russian oligarchs, and ramping up efforts to capture their “ ill-begotten gains.”