This Is How America Intends To Go About Economically Suffocating Putin’s Russia.
This is one of the few subjects that has reached a consensus in the American Congress.
America is a country more divided than ever. Donald Trump's four years in the White House have only deepened the divisions within the country, and Joe Biden's first year in the White House has not helped.
Thus, there are very few issues on which both Republicans and Democrats agree.
However, one measure has almost achieved unanimity in the US Congress. The Senate and the House of Representatives passed late last week the revocation of the trade status of Russia and Belarus, in response to the war in Ukraine. The upper house voted the text by 100 to 0, the lower house by 420 to 3, before Joe Biden signed the final entry into force.
Washington thus deprives Russia of its “most favored nation clause”, a basic principle of reciprocity in free trade.
With this decision, America opens the way to heavy trade sanctions and gives itself the right to severely tax imports of Russian products. This could concern steel and aluminum in particular. It is worth remembering that only two other countries are currently deprived by Washington of this clause: Cuba and North Korea.
For America, Russia is now on the same level as Cuba and North Korea. This speaks volumes about what America is trying to do with Russia.
Here is what Richard Neal, a Democratic congressman from Massachusetts, said:
“We have no time to waste and we must punish Vladimir Putin immediately.”
Senate Democratic Leader Chuck Schumer didn't say it any better:
“No nation whose military commits war crimes deserves a free trade status with the United States.”
The message is clear to Vladimir Putin. America will do everything in its power to make Russia stop its war in Ukraine. Everything in implementation without crossing the red line that would mean entering direct military opposition on the ground in Ukraine. Joe Biden has already reminded us that this would be tantamount to starting World War III. And no one has such an interest. Not even Vladimir Putin, who would be careful not to attack a NATO member country.
Congress has also approved Joe Biden's decision to impose a total embargo on Russian oil imports and is demanding that the federal government call for Russia's suspension from the World Trade Organization (WTO). Some of these measures had passed the House of Representatives last month while the energy bill mirrors the executive order already signed by Joe Biden in early March 2022.
But elements of the language remained significantly different. These differences had been overcome earlier in the week, clearing the way for a vote.
While Congress was working on these texts, the US Treasury announced sanctions against two new companies controlled by the Russian state: Alrosa, a mining giant that alone accounts for 90% of the diamonds mined in Russia and 28% of the world market, and United Shipbuilding Corporation (USC), the leading Russian shipbuilder which has built almost all of the country's warships.
Final Thoughts
Washington hopes the new sanctions will further weaken Moscow. According to a White House report, which cites economic experts, Russian GDP is expected to fall this year by 15%, while inflation is already approaching 15%. Total imports of Russian products last year amounted to $30 billion in the United States, including $17.5 billion of crude oil, which is now banned.
Moreover, it is a safe bet that the White House will continue to pressure the European Union to ban Russian gas imports, depriving Putin's country of a major financial windfall. The effects will be hard to take for Europe, but it is the best way to continue to put pressure on the Russian economy to suffocate it.
The final goal remains the same: to make this war in Ukraine economically and financially impossible for Vladimir Putin.