U.S., Allies Mount Pressure on Russia
The United States and its allies have issued several rounds of punishing sanctions on Russia in response to its invasion of Ukraine, as the Chamber has
summarized in recent updates to members. Among the financial and global economic consequences of the Russian invasion of Ukraine and the allied sanctions on Russia are the following:
- The ruble has lost about 40% of its value in the last 10 days, many Russian banks are closed, and ATMs and payment services are intermittent in Russian cities;
- Global wheat and other grain prices have soared; Russia and Ukraine together account for 30% of global wheat exports, and war on the Black Sea littoral is blocking trade;
- The Bloomberg Commodity Spot Index is on course to rise the most it has in any week since at least the 1960s;
- The Dow Jones Russia GDR Index, which tracks London-traded Russian companies, has plunged 98% in two weeks — wiping out $572 billion from the market value of 23 stocks;
- Russia’s flagship Urals grade is selling for about $20 a barrel less than Brent as Western refiners shun Russian crude even as the main global benchmarks soar;
- The Wall Street Journal reports that tough export controls—that is, U.S. use of the Foreign Direct Product Rule—banning shipments of technology products to Russia’s defense, aerospace, and maritime industries are “so broad and complex that some companies are simply suspending exports altogether.”
Most recently, the Treasury Department
announced on March 3 it was sanctioning “numerous Russian elites and their family members” who provide “direct and indirect support” to the Russian government. The Treasury identified certain property of these individuals to block or seize.
The Treasury also announced it will sanction Russian intelligence-directed disinformation outlets and their leaders in the strongest set of actions taken against Russian-government operated media since it invaded Ukraine. Additionally, the State Department
imposed sanctions on 22 of Russia’s defense-related firms.
The Commerce Department’s Bureau of Industry and Security (BIS) on March 3 announced it was expanding the existing sanctions by adding a new prohibition under the Export Administration Regulations (EAR) targeting Russia’s oil refinery sector. The new export controls – in the form of a
final rule – will further restrict revenue that could support Putin’s military capabilities.
On March 2, Treasury
announced it would publish new public guidance to prevent Russia’s central bank from evading U.S. sanctions. That same day, the Department of Commerce
imposed export controls on Belarus for its support of Russia’s invasion of Ukraine. These restrictions largely mirror the ones placed on Russia.
The Chamber hosted White House, Treasury, Commerce, and State Department officials on March 3 for a briefing with 250 companies. Officials condemned Russia’s invasion, applauded the departure of U.S. companies from Russia, and pledged there will be more sanctions as needed. Officials also emphasized the administration’s intent to avoid sanctioning energy, as President Biden indicated in his State of the Union address.
On Capitol Hill, lawmakers are mulling options to penalize Russia and provide support for Ukraine. While the broader bipartisan sanctions legislation package — led by Senate Foreign Relations Committee Chairman Bob Menendez (D-NJ) — stalled last month, several other proposals have been introduced. In a March 3
letter to the State and Treasury Departments, Senator Menendez outlined next steps the administration should take to “maximize” sanctions against Russia and Belarus.
Senate Finance Committee Chairman Ron Wyden (D-OR)
introduced legislation that would revoke Russia’s “permanent normal trade relations” (PNTR) or most-favored nation status. Doing so would allow U.S. tariffs to be raised above the “bound” tariff rates the United States extends to other members of the World Trade Organization (WTO). The committee’s ranking member, Mike Crapo (R-ID), said he supports the legislation. Senators Rob Portman (R-OH), Ben Cardin (D-MD), Sherrod Brown (D-OH), and Bill Cassidy (R-LA) announced bills that would do the same. Canada
announced on March 3 it was removing most-favored nation treatment from Russia and Belarus, making it the first country to do so.
In the House, similar
legislation was introduced by Ways & Means Trade Subcommittee Chairman Earl Blumenauer (D-OR). The House bill, which would revoke PNTR for Russia, is growing in support with 27 co-sponsors. Of these co-sponsors, all are Democrats with the exception of Rep. Tom Rice (R-SC).
Targeting Russia’s energy industry, Senators Joe Manchin (D-WV) and Lisa Murkowski (R-AK) introduced the “
Ban Russian Energy Imports Act,” a bill that would do what its name says. A companion bill was also introduced in the House and received support from House Speaker Nancy Pelosi (D-CA). The lawmakers argue the U.S. relies too heavily on Russian energy and needs to reduce its dependence on Russia. (On a related note, the Chamber
outlined in a blog post this week the case for further developing U.S. energy resources.) However, the White House press secretary said the Biden administration does not have a “strategic interest” in reducing global energy production, which would also raise domestic gas prices.
Finally, the White House
asked Congress to approve $10 billion in aid for Ukraine, which could be included in the omnibus spending package being crafted by House and Senate appropriators. Government funding is set to run out March 11; observers indicate a short stop-gap CR may be necessary pending approval of the omnibus.
The Chamber will continue to monitor developments and engage with the administration and Congress as these policies are implemented. For further information, please contact Senior Vice President for International Policy John Murphy (
jmurphy@uschamber.com) or Director for International Policy Isabelle Icso (
iicso@uschamber.com). On matters related to Ukraine’s humanitarian crisis, please contact U.S. Chamber of Commerce Foundation Senior Vice President Marc DeCourcey (
mdecourcey@uschamber.com).
USTR Releases 2022 Trade Policy Agenda and 2021 Annual Report
On March 1, the Office of the U.S. Trade Representative (USTR)
released its 2022 Trade Policy Agenda and 2021 Annual Report. In the agenda, USTR maintained its focus on implementing a “worker-centered trade policy” as well as continued work with allies. USTR highlighted five areas through which it supports workers: 1) labor rights, 2) decarbonization and sustainable environmental policies, 3) agriculture, 4) supply chain resiliency, and 5) combatting Covid-19. The agency also emphasized its commitment to vigorous enforcement efforts and inclusive stakeholder engagement.
Ambassador Katherine Tai
stated upon the report’s release:
“President Biden believes that America is at its best when we are leading on the world stage to deliver economic prosperity and growth to our citizens and communities. The 2022 Trade Policy Agenda and 2021 Annual Report provide a detailed look at some of the key accomplishments in the first year of the Biden Administration, and how we intend to build on this progress. I look forward to continuing to lead this office and working with my colleagues across the administration to deliver on President Biden’s vision for trade that is equitable, fair, and lasting.”
Highlights and observations from the trade policy agenda and annual report are as follows:
- Labor: On labor rights, the agency pointed to U.S.-Mexico-Canada Agreement (USMCA) implementation and tools like the rapid-response mechanism, the passage and implementation of the Uyghur Forced Labor Prevention Act (UFLPA), and ongoing work at the World Trade Organization (WTO), Organization for Economic Cooperation and Development, G7, and U.S.-EU Trade and Technology Council.
- Climate: The climate section included a notable shift from using carbon border adjustments — featured in last year’s report — to bilateral trade agreements, such as the steel-related deals struck with the European Union and Japan, to address climate change via trade policy.
- China: The verbiage used in the China section was perhaps more pointed than last year’s report, indicating that officials are considering the use of all existing — and potentially new — tools to combat China’s non-market trade practices.
- Multilateral institutions: The multilateral institution section featured segments on the Indo-Pacific Economic Framework (IPEF), which provided few new details, as well as pledges of commitment to the WTO and its associated reform.
As for the 2021 annual report, it largely mirrors last year’s with the addition of a bolstered focus on inclusive trade policies:
- Trade agreements: A key change is that the section on agreements notified for negotiation (European Union, Japan, Kenya, and the United Kingdom) was removed entirely, with a focus on trade agreements “in force” and other trade initiatives.
- Section 301: The report includes a section dedicated to Section 301 product exclusions, which states USTR is reviewing comments on the “possible reinstatement” of a portion of previously granted exclusions.
- Digital trade: While the agenda was mum on digital trade, merely mentioning a digital component in IPEF and supporting digital economy cooperation with trading partners, the report had a dedicated section. It stated USTR raised digital issues in both bilateral and multilateral engagements, “including in consultations with free trade agreement partners.” USTR also said it was looking at how digital trade policies affect workers and consumers.
The full report can be viewed
here, and fact sheet is available
here.
For further information, please contact Director for International Policy Isabelle Icso (
iicso@uschamber.com).
U.S.-South Africa Business Council Signs MOU to Boost Trade, Investment
The U.S. Chamber of Commerce’s U.S.-South Africa Business Council, the American Chamber of Commerce in South Africa (AmCham South Africa), and Business Unity South Africa (BUSA) signed a Memorandum of Understanding (MOU) on March 2 to enhance the bilateral commercial partnership between their nations. The MOU will serve as a foundation for increased cooperation between the U.S. Chamber, AmCham South Africa, and BUSA, as ‘priority partners’ in organizing future policy, advocacy, and business activities and events to promote the U.S.-South Africa economic partnership. The MOU signing was witnessed by Chargé d’Affaires a.i., at the U.S. Mission to South Africa, Todd P. Haskell, and the Minister for Economic Affairs of the South African Embassy on behalf of the Ambassador Her Excellency Nomaindiya Cathleen Mfeketo.
Vice President of the U.S.-Africa Business Center Kendra Gaither
stated:
“It is my pleasure to represent the U.S. Chamber of Commerce today at the signing of our MOU with AmCham South Africa and BUSA, which opens the next chapter in a long, fruitful collaboration. This MOU will leverage each organization’s comparative advantage so that the U.S. Chamber, AmCham South Africa, and BUSA can foster business growth and a robust economic environment between our two countries.”
“I am especially proud to see this MOU not only builds on past activities with AmCham South Africa and BUSA—which have produced numerous investment forums and important commercial dialogues—but that it also marks a key step in honoring our 2019 pledge to re-energize the U.S.-South Africa Business Council’s mission, in its 10th anniversary year, to double U.S. commercial and foreign direct investment in South Africa by 2025.”
For more on the U.S. Chamber of Commerce’s U.S.-South Africa Business Council, the premier Washington-based organization dedicated to strengthening the economic relationship between the United States and South Africa, please visit
here or contact Vice President of the U.S.-Africa Business Center Kendra Gaither (
kgaither@uschamber.com).
Business Groups Urge White House to Prevent West Coast Port Strike
On March 1, the U.S. Chamber joined a group of business associations in sending a
letter to President Joe Biden and Vice President Kamala Harris calling for “engagement in the impending contract negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).” These groups represent West Coast ports, where over 44% of nationwide container port traffic takes place.
The current contract expires July 1, and the absence of negotiations has increased uncertainty among importers and exporters who fear further supply chain disruptions. The groups assert that the outcome of these negotiations could “determine the future of U.S. supply chain competitiveness” as further port slowdowns risk “compounding inflationary pressure and causing long-lasting damage to consumer confidence and American businesses.”
The groups outline essential steps forward to ensure U.S. ports are properly positioned to compete globally:
“Of paramount importance is a targeted investment and support for infrastructure modernization and automation with workers skilled and prepared for these advanced jobs. In addition, addressing systemic operational challenges, and enabling transparency, data sharing and interoperability to facilitate end-to-end visibility. We also believe there needs to be continued recognition of the crucial role port workers have played in supporting supply chain and logistics needs during the most challenging of times.”
For further information, please contact Vice President for Supply Chain Policy John Drake (
jdrake@uschamber.com).
Chamber Joins Bipartisan Coalition Urging Immigration Reform
On March 2, the U.S. Chamber joined a diverse group of industries and organizations across the political spectrum in
announcing a new coalition, The Alliance for a New Immigration Consensus (ANIC), to advance bipartisan legislative solutions on immigration reform and border security during the 117th Congress.
The group, consisting of the business community, faith leaders, and advocates, is working to build support for bipartisan legislative solutions that provide permanent legal protections and other reforms for Dreamers, TPS recipients, and agricultural workers.
U.S. Chamber Vice President of Immigration Policy Jon Baselice
stated:
“The U.S. Chamber of Commerce joined The Alliance for a New Immigration Consensus because our elected officials cannot continue to forego opportunities to fix our nation’s broken immigration system. We believe that elected officials can reach a strong bipartisan consensus on providing permanent legal protections to Dreamers, addressing America’s agricultural labor shortage, and strengthening our nation’s border security efforts. The Chamber is happy to work side-by-side with our friends in the faith, education, and advocacy communities to make these long-overdue reforms a reality.”
Fellow members of the alliance include the Americans for Prosperity, Business Roundtable, the Bipartisan Policy Center Action, the LIBRE Initiative, the National Association of Manufacturers, Stand Together, the National Immigration Forum, World Relief, the Niskanen Center, and the National Association of Evangelicals.
In a
letter to House and Senate leaders, members of the coalition wrote:
“At no other point in recent history has the need for immigration reform been greater than it is today. Simply put, the system is broken. Millions of workers, many of whom were indispensable to the nation’s COVID-19 response, are living in legal jeopardy. Apprehensions at the southern border are at historic highs. And employers are struggling to find workers to fill jobs in many industries.”
The letter outlines three priorities for Congress ahead of the midterm elections:
- Address the uncertainty that dominates the everyday lives of so many undocumented immigrants seeking to contribute to our economy;
- Tackle issues facing our border and strengthen our nation’s ability to manage the border in a secure and orderly manner; and
- Solve the workforce limitations in our agricultural sector that are currently contributing to supply chain issues and raising cost concerns.
The Alliance for a New Immigration Consensus believes that reaching a legislative consensus on incremental reforms to our immigration system in the short term can lead to larger, more systemic bipartisan reforms in the future.
The Alliance for a New Immigration Consensus (ANIC) is a public coalition of business, faith, and advocacy organizations working to build support for bipartisan legislative solutions that provide permanent legal protections and other reforms for Dreamers, TPS recipients, and agricultural workers in 2022. To learn more about ANIC’s efforts, visit
http://www.anic.co/.
For further information, please contact Vice President of Immigration Policy Jon Baselice (
jbaselice@uschamber.com).
ICYMI: Chamber Comments on “Distributional Effects of Trade on Workers”
With U.S. Trade Representative Katherine Tai commenting on the issue in recent days, the Chamber calls the attention of members to
comments it filed on January 26 to the U.S. International Trade Commission (ITC) on its
investigation into the “Distributional Effects of Trade and Trade Policy on U.S. Workers.” Ambassador Tai
requested the ITC launch the two-part investigation to provide new research, data, and analytical tools to “better inform U.S. trade policy and enable USTR to better develop an equitable, durable, worker-centered trade policy that contributes to our nation’s competitiveness in a 21st century global economy.” The Chamber may submit additional comments as the investigation proceeds.
For further information, please contact Senior Vice President for International Policy John Murphy (
jmurphy@uschamber.com).
Commentary
U.S. Chamber (March 1) by Suzanne Clark
U.S. Chamber (March 1) by Martin Durbin
