US ends Russia’s market economy status in anti-dumping proceedings

The United States said Thursday it is revoking Russia’s market economy status in anti-dumping proceedings, a move that could open doors to tougher trade actions amid tense relations between Moscow and Washington.

The move comes after Western nations imposed unprecedented sanctions on Russia following its invasion of Ukraine in February, while authorities in Moscow scrambled to shore up its economy and the ruble.

“This decision gives the United States the ability to apply the full force of the (anti-dumping) law to address the market distortions caused by increasing interference from the Russian government in their economy,” the Commerce Department said in a statement.

Dumping takes place when a foreign producer sells products in the US at a price below that in its home market, or lower than its cost of production.

The department’s analysis found that “extensive government involvement in the economy” has led to distorted prices and costs in Russia, it said.

These do not accurately reflect whether Russian firms are fairly pricing imports to the US, and the rise of Russian state influence in the economy puts US industries at a disadvantage when trying to compete globally, the department added.

The latest action aims to ensure that American industries get relief from “unfair imports.”

The determination of a market economy status is based on an evaluation of criteria such as currency convertibility, government control of means of production, and foreign investment climate.

“Commerce found extensive backtracking in these areas, particularly since the invasion of Ukraine,” the department said.

The US granted Russia market economy status in 2002, a key step towards admission to the World Trade Organization. (AFP)