U.S. President Biden Raises Tariffs on Russian Imports

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Summary

On June 27, 2022, U.S. President Biden signed a proclamation to raise the tariff rate on $2.3 billion worth of Russian imports to 35%. The tariff increase will take effect for import entries made on or after July 27, 2022.

Unfortunately, the specific list of products that will be affected by this latest action – referred to as Annex A - has not yet been published. We anticipate that this will be released soon.

More Detailed Explanation

In April 2022, President Biden signed a bill that revoked Russia’s Normal Trade Relations (“NTR”) status (hereafter, “the Suspending NTR Act”), thereby giving the President the authority to raise tariffs on Russian goods beyond the most-favored-nation levels.

For some imported products from Russia, simply revoking NTR status caused a significant increase in import duty. However, for many other products, the effect was much more modest, given that, under then-existing U.S. tariff codes, there was little difference between the most favored nation (“MFN”) import duty rate and the import duty rate for countries that do not have MFN privileges.

Accordingly, under the authority of the Suspending NTR Act, the latest proclamation will increase “the column 2 rates of duty to 35 percent ad valorem on certain other products of the Russian Federation.” While the column 2 rates on Russia took effect when President Biden signed the Suspending NTR Act, the latest increase to the column 2 rates will take effect on July 27, 2022.

According to the White House’s press briefing, the tariff increase will apply to “more than 570 groups of Russian products worth approximately $2.3 billion.” Given that the U.S. imported about $29.6 billion worth of goods from Russia last year, the tariff on $2.3 billion worth of products will mean that the tariff will only affect about 7.8% of overall Russian imports.

Note that the U.S. has also imposed an import ban on many Russian products, including energy imports, as well as seafood, alcoholic beverages, and non-industrial diamonds.

The latest proclamation was announced on the heels of the G7 summit in Germany.

Other nations have already imposed similar tariff increases against Russian imports. For example, Canada, New Zealand and the United Kingdom have implemented a 35% tariff on Russian goods.

According to the fact sheet from the White House, “President Biden and other G7 leaders will seek authority to use revenues collected by new tariffs on Russian goods to help Ukraine and to ensure that Russia pays for the costs of its war.”

Curtis will continue to monitor developments in this rapidly changing area.