International Trade With Russia
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Russia invaded Ukraine about a month ago and since then the U.S. and allies have pursued a series of economic sanctions against Russia in retaliation for the invasion. On Friday March 11, President Biden said that the U.S. and other G-7 nations will deny Russia from a favored nation status. This meaning that the U.S. and allies will revoke Russia’s most-favored nation trade status. How will this impact the U.S.? Today we will break down some of the numbers.
According to the Census Bureau, Russia was the U.S.’ 23rd largest trading partner, totaling $36.1 billion in two-way goods trade in 2021. $29.1 billion of which account for Russian products into the U.S.
60% of what the U.S. imports from Russia is in energy, including oil, coal, and natural. In 2021 the U.S. imported an average of 209,000 barrels per day of crude oil from Russia. Russian oil accounts for about 3% of what the U.S. imports each year, but that is still enough of a jump to drive up gasoline prices for all of us.
Energy aside, other goods imported from Russia will see an increase as well if they have not already. The move to revoke Russia’s most-favored nation trade status will cause the U.S. tariff rate on Russia caviar to jump from 15% to 30% and levies on plywood will increase from 0 to 30%, according to the Wall Street Journal. Vodka will also be subject to a tariff of $1.78 per liter.
As the war continues the U.S. and allies will continue to do what they can to support Ukraine, even if it is just an economic blow. However, doing so will likely lead to more inflation not just in the U.S. but globally.
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