Today, by overwhelming margins, Congress passed two pieces of legislation to further punish Russia for its invasion of Ukraine. The bipartisan bills suspend Permanent Normal Trade Relations (PNTR) with Russia and Belarus and codify President Biden’s recent Executive Order banning Russian energy imports. The bills now head to the President’s desk and are expected to be signed into law in the coming days.
H.R. 7108, the Suspending Normal Trade Relations with Russia and Belarus Act, passed the Senate by a vote of 100-0 and the House by a vote of 420-3. Among other things, the bill denies Russia and Belarus access to Most Favored Nation (MFN) tariff status, effective one-day after enactment. Russia and Belarus will join Cuba and North Korea as the only nations that do not have PNTR status with the United States. Early last month, in coordination with international allies, President Biden announced his support for revocation of PNTR with Russia – a move that required Congressional action.
While the United States imports a relatively small volume of goods from Russia, the move is expected to significantly raise the cost of certain key materials that U.S. manufacturers frequently source from Russia. For example, the duty rates on imports of unwrought nickel and nickel waste and scrap will increase from duty free to $0.066/kg. Russia is also a source of primary and unwrought aluminum for U.S. manufacturers. The current, general duty rate for these products is either free or less than 3 percent, but will increase to 10.5 to 25 percent. Similar increases will occur with respect to imports of Russian titanium castings and mill products, with duty rates jumping from between 5.5 and 15 percent to 45 percent post-revocation.
Additionally, H.R. 7108 grants the President the authority to further increase tariffs on imports from the two nations after consulting with Congress. That authority expires January 1, 2024.
The bill also directs the United States Trade Representative (USTR) to use “the voice and influence of the United States” at the World Trade Organization (WTO) to: (1) condemn Russia’s aggression in Ukraine; (2) encourage other WTO members to suspend trade concessions to Russia and Belarus; (3) consider further steps to suspend Russia’s participation at the WTO; and (4) work to halt Belarus’s WTO accession process.
Finally, H.R. 7108 permanently reauthorizes the Global Magnitsky Human Rights and Accountability Act, which was set to sunset in December 2022. The law authorizes sanctions on individuals responsible for human rights abuses and corruption.
H.R. 6968, the Ending Importation of Russian Oil Act, passed the Senate by a vote of 100-0 and the House by a vote of 413-9. The bill prohibits imports of Russian energy products – specifically, all products under Chapter 27 of the Harmonized Tariff Schedule – in a manner consistent with President Biden’s March 8 Executive Order.
Under the respective bills, subject to certain conditions and Congressional disapproval, the President is granted the authority to return normal tariff treatment and resume imports of Russian energy products.