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Russia to lose favored trading status with Western nations

The United States, European Union and G-7 are all moving to end trade agreements with Russia that give the Kremlin lower prices on imports.

WASHINGTON (CN) — U.S. President Joe Biden called for a freeze on normal trade relations with Russia on Friday, a move that the U.S. is taking in lockstep with European countries to raise the cost of Russian imports and isolate the Russian economy from global trade.

"It will be another crushing blow to the Russian economy, it's already suffering very badly from our sanctions," Biden said during a speech this morning announcing the sanctions.

The European Union and G-7, made up of Canada, France, Germany, Italy, Japan and the United Kingdom, will also move to suspend permanent normal trade relations, known as PNTR, with Russia in the hopes of ramping up the economic cost of Russia's invasion of Ukraine.

"Democracies are rising to meet this moment, rally the world to the side of peace in the side of security. We're showing our strength and we will not falter," Biden said.

Congress must still pass legislation authorizing the change in order for the U.S. to suspend trade relations that give Moscow and the U.S. discounts on each other's products. One such measure has already curried broad support.

Earlier this week, a bipartisan coalition of lawmakers introduced a plan to suspend normal trade relations with Russia and Belarus, and many on the hill have repeatedly called for stricter measures cutting down on Russian imports and raising tariffs.

But the Russia sanctions bill that eventually passed the House Wednesday didn't go that far, instead focusing on sanctioning Russian energy imports and calling for a review of Russia's membership in the World Trade Organization.

Biden acknowledged during his speech that he had asked Congress to delay voting to freeze trade relations with Russia until he had gotten U.S. allies to back the idea.

"I would like to offer a special thanks to Speaker Pelosi who's been a strong advocate for revoking PNTR and who agreed to hold off on that in the House until I could line up all of our key allies to keep us in complete unit," Biden said.

The U.S. also plans to ban the import of critical Russian goods including seafood, vodka and diamonds, as well as end the export of luxury goods from the U.S. to anyone in Russia.

Biden noted the G-7 will seek to block Russia from borrowing money from the International Monetary Fund and the World Bank, on top of new sanctions later Friday targeting Russian oligarchs, elite businessmen with close ties to the Kremlin.

"Putin is an aggressor, he is the aggressor and Putin must pay the price. He cannot pursue or threaten the very foundations, which he's doing, the very foundations of international peace and stability, and then ask for financial help from the international community," Biden said.

Biden's Friday announcement comes on top of a series of previous sanctions on Russia, including an order he issued earlier this week banning the import of Russian oil, gas and coal.

On Thursday, the Senate approved a government spending package that included $13.6 billion in humanitarian and military aid to Ukraine, well above the $10 billion the White House had requested to support Ukraine and the U.S. European allies as Russia continues its military attack on the former Soviet republic.

"We already know Putin's war against Ukraine will never be a victory. He hoped to dominate Ukraine without a fight. He failed. He hoped to fracture European resolve. He failed. He hoped to weaken the Transatlantic Alliance. He failed. He hoped to split apart American democracies in terms of our positions. He failed," Biden said.

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