On The Money — US suspending normal trade with Russia
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Today’s Big Deal: The U.S. and its allies are stepping up their campaign to constrain the Russian economy. We’ll also look at who stands to benefit from rising oil prices and the fallout of the government funding deal.
But first, Instagram is going out in Russia.
Let’s get to it.
US, allies to revoke Russia’s trade status
President Biden announced Friday that the United States and other Group of Seven (G-7) nations would move to revoke the “most favored nation” trade status for Russia as part of a new tranche of penalties in response to Russian President Vladimir Putin’s invasion of Ukraine.
In remarks from the White House, Biden said the coordinated move would deal “another crushing blow to the Russian economy.”
- The move requires an act of Congress, but Biden said Friday that Speaker Nancy Pelosi (D-Calif.) had “agreed to hold off” on a bill in the House ending normal trade relations with Russia until he could get U.S. allies behind a plan to do so together and signaled there was a bipartisan agreement to introduce legislation.
- The decision will open the door to the U.S. and other countries imposing higher tariffs on Russian goods, which will further hamper the Russian economy.
“The free world is coming together to confront Putin. Our two parties here at home are leading the way,” Biden said.
“And with that bipartisan cooperation, I’m looking forward to signing into law the bill revoking PNTR,” Biden said, referring to the status of permanent normal trade relations.
Morgan Chalfant has more here.
LEADING THE DAY
Here’s who stands to win from high gas prices
Not everyone is suffering from high gas prices that have spiked further with Russia’s invasion of Ukraine and the international sanctions imposed on Moscow.
Some players, including the U.S. oil producers, stand to gain financially. And countries such as Saudi Arabia stand to gain both monetarily and politically.
- Companies that drill for oil: As oil prices rise, producers can get more money for their product. “Oil drillers and producers — it’s a grand slam for them right now,” said Patrick De Haan, head of petroleum analysis at GasBuddy, a gasoline price tracking website.
- Shale producers: Shale oil producers are particularly well-suited to benefit from high gas prices given the relatively quick turnaround for extracting this type of oil.
- Saudi Arabia and the United Arab Emirates: Saudi Arabia and the United Arab Emirates could benefit from the price spike if they decide to put more oil on the market.
- Iran — if it can get a nuclear deal across the finish line: If Iran could get a nuclear deal with the U.S. and other nations done, it may be able to get its barrels on the market.
The Hill’s Zack Budryk and Rachel Frazin explain here.
CLOSING THE LOOPHOLES
Senate finance chair proposes stripping Russian oligarchs’ ‘tax goodies’
A new proposal by Senate Finance Committee Chair Ron Wyden (D-Ore.) seeks to eliminate tax benefits for sanctioned Russians doing business in the U.S., as well as to nix U.S. tax credits and deductions for taxes paid to Russia.
“Russian oligarchs and companies supporting [Russian President Vladimir] Putin shouldn’t be getting tax breaks in the United States,” Wyden said in a statement. “We should take away every special tax benefit for all sanctioned individuals, as well as give [Treasury Secretary Janet] Yellen the authority to identify other individuals, companies, or governments supporting the invasion that should lose their tax goodies.”
The Hill’s Tobias Burns breaks it down here.
CAN’T DO CANNABIS
Congress overrides DC voters, keeps sales of marijuana illegal in District
A GOP-backed ban on weed sales in Washington, D.C., was preserved in a sprawling government funding bill passed by Congress on Thursday, despite opposition from advocates who say the provision overrides the will of the District’s residents years after they voted to legalize marijuana.
The Harris Rider, a provision barring the legalization of recreational marijuana sales in the nation’s capital named after its chief proponent, Rep. Andy Harris (R-Md.), sailed through the Senate late Thursday, a day after passing the House, as part of a larger $1.5 trillion spending omnibus package to fund the government through fiscal year 2022.
Congressional Democrats had pushed to do away with the provision, opting not to include the rider in the government funding bills unveiled by appropriators in both chambers last year. But negotiators say the rider was reinstalled in appropriations after sharp opposition from Republicans.
“Republicans were the ones who insisted. They were ready to shut down the government,” said Sen. Chris Van Hollen (D-Md.), whose panel handles D.C. appropriations.
Congress has since blocked the district from adhering to the will of the voters in each annual spending package, even as the issue appears to have fallen through the cracks in spending negotiations, with a number of members saying this week they were either not following the status of the rider or unaware of its existence.
Karl and Aris have the details here.
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Good to Know
The government funding bill sent to President Biden late Thursday night modestly raises funding for the Department of Homeland Security while seeking to exert limitations on the agencies managing U.S. immigration policy.
The roughly $182 billion bill does not rescind $2 billion in border wall funding — a messaging victory for Republicans even though the Biden administration has refused to build the wall. It’s a detail that irked progressives, along with the legislation’s funding for significant detention capacity within U.S. Immigration and Customs Enforcement.
Here’s what else we have our eye on:
- House Speaker Nancy Pelosi (D-Calif.) said Friday that legislation to revoke Russia’s “’most favored nation” trade status has already been prepared, and that the House plans to vote on it next week.
- The Hill put together a list of the countries that import the most oil from Russia, with China leading the way.
- Deutsche Bank said it is winding down operations in Russia following criticism of the bank’s previous stance to stay in the country.
ON TAP NEXT WEEK
- The Senate Finance Committee holds a hearing “The Promise and Challenge of Strategic Trade Engagement in the Indo-Pacific Region” at 10 a.m.
- The Senate Committee on Banking, Housing, and Urban Affairs holds a hearing “Advancing Public Transportation under the Bipartisan Infrastructure Law” at 2:30 p.m.
- The House Small Business Subcommittee on Oversight, Investigations, and Regulations holds a hearing “An Empirical Review of the Paycheck Protection Program” at 10 a.m.
- The House Select Committee on Economic Disparity and Fairness in Growth holds a hearing “Big Ideas for Small Businesses: Fostering American Entrepreneurship Through Starting, Sustaining and Growing Small Businesses” at 10 a.m.
- The House Financial Services Committee holds a markup to consider pending legislative items at 10 a.m.
- The House Energy and Commerce Subcommittee on Communications and Technology holds a hearing “5G and Beyond: Exploring the Next Wireless Frontier” at 10:30 a.m.
- The Hill hosts a webinar discussion “A Connected & Sustainable Society,” featuring a conversation with Sen. Deb Fischer (R-NE) and Reps. Robin Kelly (D-IL) and Grace Meng (D-NY) at 1:00 a.m.
- The House Administration Committee holds a hearing “Examining Stock Trading Reforms for Congress” at 2:00 p.m.
- The Joint Economic Committee (JEC) holds a hearing “Examining the Impact of Shareholder Primacy: What it Means to Put Stock Prices First” at 2:30 p.m.
- The Senate Committee on Small Business and Entrepreneurship holds a hearing “Small Business Franchising: An Overview of the Industry, SBA’s Role, and Legislative Proposals” at 2:30 p.m.
- The Senate Special Committee on Aging holds a hearing “Unbanked and Credit Invisible: Building Financial Inclusion for America’s Underserved Populations” at 9:30 a.m.
- The House Science, Space, & Technology Subcommittee on Research and Technology holds a hearing “Setting the Standards: Strengthening U.S. Leadership in Technical Standards” at 10:00 a.m.
- The House Ways and Means Subcommittee on Oversight holds an oversight hearing of the IRS, featuring testimony from Commissioner Charles Rettig at 10:00 a.m.
- The House Senate Committee on Banking, Housing, and Urban Affairs holds a hearing “Understanding the Role of Digital Assets in Illicit Finance” at 10:00 a.m.
- The Senate Finance Committee holds a hearing “Examining Charitable Giving and Trends in the Nonprofit Sector” at 10:00 a.m.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you Monday.