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U.S. President Joe Biden delivers remarks on the Russian invasion of Ukraine at the Roosevelt Room of the White House in Washington on March 11.Sarah Silbiger/The New York Times News Service

The Group of Seven countries and the European Union are moving to revoke Russia’s “most favoured nation” trading status and exclude it from the International Monetary Fund and World Bank, as the West continues to impose sanctions over President Vladimir Putin’s invasion of Ukraine.

The United States will also ban imports of Russian vodka, seafood and diamonds, while the EU will block iron and steel goods from the country. And the G7 and EU vowed to crack down on Russia’s use of cryptocurrencies to circumvent previous financial sanctions.

The moves were announced Friday, three days after the U.S. imposed an embargo on Russian oil, gas and coal. The new measures mirror actions by Canada last week, when Ottawa hiked tariffs on most Russian imports to 35 per cent and also banned Russian petroleum.

“As Putin continues his merciless assault, the United States and our allies and partners continue to work in lockstep to ramp up the economic pressure on Putin and to further isolate Russia on the global stage,” U.S. President Joe Biden said at the White House, following a phone call with Ukrainian President Volodymyr Zelensky.

Most favoured nation status, also referred to in the U.S. as “permanent normal trade relations,” allows a country to trade under relatively low tariffs set by the World Trade Organization. Revoking Russia’s status would allow the U.S. and the EU to jack up tariffs. It was not immediately clear when the measure would take effect. A bill that would strip Russia of most favoured nation status is currently working its way through the U.S. Congress.

Suspending Russia from the IMF and World Bank would cut off a potential source of government funding by denying it loans.

The U.S. and the EU said Friday they would also block exports of luxury goods purchased by Russian oligarchs, including watches, jewellery, fancy cars, clothes and premium alcohol. The U.S. estimates these bans would affect US$550-million of American goods annually.

“Those who sustain Putin’s war machine should no longer be able to enjoy their lavish lifestyle while bombs fall on innocent people in Ukraine,” European Commission President Ursula von der Leyen said in a statement.

Ms. von der Leyen said the EU will prohibit future investment by European companies and citizens in Russia’s oil and gas sector. But the EU will not join Canada, the U.S. and Britain in imposing an oil embargo. Unlike those countries, which import small amounts of Russian fossil fuels, the EU relies on Russia for roughly one-third of its oil and gas imports.

The EU is Russia’s largest trading partner, buying nearly 38 per cent of its exports in 2021, according to European Commission numbers. Russia was the EU’s fifth-largest trading partner. The U.S. does about US$35-billion in annual trade with Russia, according to figures from the U.S. Trade Representative, representing one per cent of U.S. imports.

A breakdown of U.S. imports from Russia compiled by the Progressive Policy Institute, a U.S. think tank, lists petroleum products, palladium, king crabs, iron, plywood and fertilizer components among the top items. The ban on vodka, seafood and diamonds is expected to affect US$1-billion in Russian exports, the White House said.

Since Mr. Putin launched his full-scale invasion of Ukraine two and a half weeks ago, G7, NATO and EU countries have moved to impose escalating economic sanctions. These have targeted Russian banks, the country’s treasury, exports of high-tech products and the property of oligarchs.

The U.S. Congress has repeatedly pushed Mr. Biden to go further, with proposed bills to raise tariffs, ban oil and gas imports, and push for Russia’s suspension from the WTO.

The White House said Friday it would look into further restricting U.S. investment in Russia. Pension plans for public employees in California, for instance, hold about US$1.5-billion in Russian assets.

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