On Thursday, both the House and the Senate voted to pass the "Suspending Normal Trade Relations with Russia and Belarus Act" (HR 7108), and President Biden signed it into law on Friday.
It looks to me, but correct me if I've missed something in the fine print, as though the normal trade relations provisions of the version of the bill that became law are the same as those in the earlier version I described here. The key language on raising tariffs on Russia and Belarus is as follows:
SEC. 3. SUSPENSION OF NORMAL TRADE RELATIONS WITH THE RUSSIAN FEDERATION AND THE REPUBLIC OF BELARUS.
(a) NONDISCRIMINATORY TARIFF TREATMENT.—Notwithstanding any other provision of law, beginning on the day after the date of the enactment of this Act, the rates of duty set forth in column 2 of the Harmonized Tariff Schedule of the United States shall apply to all products of the Russian Federation and of the Republic of Belarus.
(b) AUTHORITY TO PROCLAIM INCREASED COLUMN 2 RATES—
(1) IN GENERAL.—The President may proclaim increases in the rates of duty applicable to products of the Russian Federation or the Republic of Belarus, above the rates set forth in column 2 of the Harmonized Tariff Schedule of the United States.
(2) PRIOR CONSULTATION.—The President shall, not later than 5 calendar days before issuing any proclamation under paragraph (1), consult with the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding the basis for and anticipated impact of the proposed increases to rates of duty described in paragraph (1).
(3) TERMINATION.—The authority to issue proclamations under this subsection shall terminate on January 1, 2024.
Section 4 then has a long and detailed set of provisions on resuming application of the lower column 1 duty rates and restoring normal trade relations if Russia/Belarus withdraws forces/ceases hostilities, poses no immediate threat to NATO allies/partners, and "recognizes the right of the people of Ukraine to independently and freely choose their own government."
And Section 5 addresses some WTO issues:
SEC. 5. COOPERATION AND ACCOUNTABILITY AT THE WORLD TRADE ORGANIZATION.
The United States Trade Representative shall use the voice and influence of the United States at the WTO to—
(1) condemn the recent aggression in Ukraine;
(2) encourage other WTO members to suspend trade concessions to the Russian Federation and the Republic of Belarus;
(3) consider further steps with the view to suspend the Russian Federation’s participation in the WTO; and
(4) seek to halt the accession process of the Republic of Belarus at the WTO and cease accession-related work.
This all raises a few questions for me:
- My understanding, based on Ed Gresser's work, is that tariffs on the main products that the U.S. imports from Russia will not rise very much when the column 2 rates are applied to them. To maximize the impact of withdrawing normal trade relations, will President Biden use the power set out in Section 3(b) of the legislation to increase tariffs on these products above the column 2 rates?
- If the war ends, what political circumstances would allow for the restoration of normal tariff treatment for Russia and Belarus? To illustrate this point, what circumstances would demonstrate that Russia "poses no immediate military threat of aggression to any North Atlantic Treaty Organization member"? Peace would be great, but my sense is that peace alone might not be sufficient for Congress to want to grant normal trade relations, permanent or otherwise, to Russia and Belarus again.
- What "further steps with the view to suspending Russia's participation in the WTO" will be taken? I'm not sure there is much chance of this suspension happening, because many WTO Members would object, but nevertheless I'm interested in seeing what people come up with here.
