On Friday, the president of the United States, Joe Biden, announced that the United States would revoke the PNTR status of Russia, in light of the Russian invasion of Ukraine.
United States along with its top allies is revoking Russia’s “most favored nation” status, which aims to downgrade the trading status of Russia, and allows the other players to impose higher tariffs on Russian products.
What do we mean by “most favored nation”?
It means that the country would be treated equally as all others. In the light of the rules provided by the World Trade Organization, the countries cannot normally discriminate between their trading partners. Therefore, revoking such status would mean that a country could levy whatever import tariffs it wants. In the United States it is also known as permanent normal trade relations. Furthermore, only North Korea, Cuba and now Russia, are the only nations which don’t have such status in the United States.
“Revoking PNTR for Russia is going to make it harder for Russia to do business with the United States, and doing in unison with other nations to make up half of the global economy will be another crushing blow to the Russian economy that’s already suffering very badly from our sanctions,” Biden said.
On 11th March, the G7 countries of the United States, Germany, the United Kingdom, Japan, France, Italy and Canada have confirmed their decision of revoking Russia’s “most favored nation” status, along with some other sanction of Moscow.
As part of this, efforts would be made to “prevent Russia from obtaining financing from the leading multilateral financial institution, including the International Monetary Fund (IMF), the World Bank and the European Bank for Reconstruction and Development.”
As the statement suggests that “Russia cannot grossly violate international law and expect to benefit from being part of the international economic order.”
Despite all the measures and sanctions, the president of States reiterated that the United States will not get involved in the conflict with Russia in Ukraine.
“We will not fight a war against Russia in Ukraine. Direct confrontation between NATO and Russia is World War III. Something we must strive to prevent,” he said.