The G7 nations have said that they would end normal trade relations with Russia on Friday as part of a series of new measures to inflict economic punishment on Moscow for its invasion of Ukraine.
The joint step, first announced by US president Joe Biden, included revoking Russia’s “most-favoured nation” status, which allows it to trade goods on preferential terms with many western countries under rules set by the World Trade Organization. The move will lead to higher tariffs on many Russian exports.
The G7 nations agreed on other measures as well, including stopping Russia from obtaining any financing from international institutions such as the IMF and the World Bank.
While the sanctions differ by country, the US and EU said they would ban exports of luxury goods to Russia and impose further curbs on members of Russia’s elite. The US will also create the legal authority for bans on investment in any sector of the Russian economy, beyond energy.
The announcement comes after the US this week banned Russian energy imports into America, targeting the biggest source of trade between the two countries and a key source of hard currency for Moscow.
In light of this fact, the US will now ban key Russian imports including seafood, alcoholic beverages and diamonds, while Brussels announced a block on imports of key iron and steel products.
The move is expected to be approved by the EU’s 27 member states next week.
The G7 also said they would ensure that cryptocurrencies could not be used by Russians to circumvent sanctions and send money out of the country.
The White House has been under pressure from Congress to revoke Russia’s status as a permanent normal trading partner for days.
The move on Friday was the latest in a series of sweeping sanctions on Moscow including targeting members of the country’s business elite, the inner circle of officials close to President Vladimir Putin, the central bank, and other key financial institutions.
Canada, a G7 member, first made the move last week and has also banned Russian oil imports.