US ratchets up trade restrictions on Russian metals, minerals

The U.S. is heavily targeting Russian metals and minerals as part of a broader package of new sanctions and tariffs a year after the invasion of Ukraine.

The Biden administration will increase tariffs on more than 100 metals, minerals and chemicals, according to a Feb. 24 White House overview of the restrictions. This includes doubling tariffs to 70% on most metal and metal products.

The administration singled out Russia's aluminum sector, slapping it with a new 200% tariff on aluminum products and items made with Russian aluminum. The aluminum trade measures are set to go live in March and April.

It was not immediately clear what other specific metals the U.S. would target with higher tariffs. The United States Trade Representative, or USTR, has not yet responded to a request for comment from S&P Global Commodity Insights.

"These actions are carefully calibrated to put economic pressure on Russia while minimizing costs to U.S. consumers," USTR Ambassador Katherine Tai said in a Feb. 24 statement.

Russia is a significant producer and exporter of metals. For example, it accounted for 7.5% of global nickel production and 40.1% of global palladium production in 2021, according to S&P Global Market Intelligence data.

In recent quarters, about 5% of U.S. aluminum imports came from Russia. And with a 200% tariff on the horizon, U.S. buyers of Russian aluminum will have an incentive to turn to alternative sources of supply from aluminum heavyweights like Canada and countries in the Middle East.

Beyond the increased tariffs on Russian metals, the Treasury Department's Office of Foreign Assets Control, or OFAC, expanded U.S. sanctioning powers under Executive Order 14024 to the metals and mining sector.

"This determination allows for sanctions to be imposed on any individual or entity determined to operate or have operated in that sector and expands the United States' ability to swiftly impose additional economic costs on Russia for its war of choice in Ukraine," the Treasury Department said in a Feb. 24 news release.

Additionally, OFAC targeted Russian metals companies with defense industry ties, including JSC Burevestnik Central Scientific Research Institute, Metallurg-Tulamash Ooo, Tpz-Rondol Ooo and Mtsenskprokat.

The fresh trade restrictions come on the anniversary of Russia's invasion of Ukraine, which disrupted metals and energy markets and shifted some supply chains for fertilizers like potash.

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