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Senate Votes to Strip Russia of Trade Status, House to Follow -Breaking

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© Bloomberg. An employee operates a binding device to ensure that lengths steel rods are ready for shipping at Oskol Electrometallurgical Plant, owned by Metalloinvest Holding Co. and located in Stary Oskol. This was Friday, Nov. 26, 2021. Iron ore prices rebounded from last week’s pandemic-driven losses on bets the impact of a new coronavirus variant may not be as severe as initially feared.

(Bloomberg). — U.S. Senate unanimously voted to remove normal trade relations status from Russia, Belarus. The legislation was sent to the House by the White House to be voted on Thursday. 

The trade legislation, passed on a rare 100-0 vote, would put Russia and Belarus in the same category as pariah states such as North Korea and Cuba, and adds to the growing list of economic barriers erected by the U.S. and its allies to punish Russian President Vladimir Putin’s government over the assault on Ukraine. It allows the U.S. and its allies to increase tariffs on imports from Russia or Belarus.

According to the legislation, tariffs on some iron products and certain steel products can be increased from 0% to 20%. A Senate Democratic aide said that plywood might be subject to a 50% levie and that some reaction engines may face import taxes of 35%.

“No nation whose military is committing war crimes deserves free trade status with the United States,” Senate Majority Leader Chuck Schumer said on the floor Thursday morning.

Joe Biden, the President of the United States, has already stopped imports last month from Russian signature products such as oil, gasoline, vodka and seafood.

Because of Senator Rand Paul (a Kentucky Republican)’s concern about how the legislation would expand the Global Magnitsky Human Rights Accountability Act which was included in the trade bill, the Senate delayed the trade bill for approximately a week. Another delay was caused by disagreements among senators. After weeks of negotiations, lawmakers finally reached an agreement.

The provision authorizes the Biden administration, for further sanctions on Russian officials in connection with human rights violations. Paul requested that the bill, named after a Russian lawyer who was killed in an investigation into tax fraud, be clearer about what types of violations would result in sanctions. After reaching an agreement with Senate leaders, he agreed to cease blocking the bill.

Although the House passed this trade measure with overwhelming votes in March, there were revisions to it in the Senate. The legislation must be returned to the House for a second vote. 

Except for eight Republicans, all House members voted to end trade ties between Russia and Belarus. Belarus hosted some Russian troops that invaded Ukraine. 

By mid-March, a quarter of the World Trade Organization’s 164 members — collectively representing 58% of the global gross domestic product — were poised to stop treating Russia as a so-called most-favored-nation under WTO rules. 

Besides the U.S., the list includes the European Union’s 27 members, Japan, the U.K., Canada, South Korea and Australia.

©2022 Bloomberg L.P.

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