In an unprecedented step, the U.S. Congress is exploring legislation to revoke Permanent Normal Trade Relations status for Russia in an effort to remove them from the 164-member World Trade Organization (WTO). Legislation to effectively end all trade with Russia and Belarus has bipartisan support and would ban the little oil the U.S. imports from Russia and authorize the White House to impose tariffs on Russian-made goods. This is in addition to roughly $11 billion in direct financial support for Ukraine the U.S. Congress is expected to pass in the coming week.
While the media is focusing much of their attention on prices at the pump, manufacturers and distributors should also expect other short-term cost increases. Although the U.S. is not reliant on Russian oil, much of Europe and Asia are. Equally as important, the large shipping vessels moving goods around the world rely on it as well. Raw materials and rare-earth minerals are another area of concern in both Russia and Ukraine, which are significant sources of aluminum, vanadium, pig iron and iron ore used to make steel, titanium for planes and stainless steel bars among other goods.
Global prices for some products and transportation will increase as Washington takes steps to literally shut Moscow out of the global economy, but Putin has united Republicans and Democrats in a way few people have in recent years.