The Day at a Glance | March 11 2022

The Top

*The United States, the European Union and G7 will revoke Russia`s “most favored nation” status.

*Industrial production in Mexico once again exceeded estimates in January (1% monthly; 4.3% annual).

*Putin considers there has been progress in recent negotiations with Ukraine.

*Reaching our growth target will be difficult and will require greater fiscal stimulus: Li Keqing, Chinese Premier.

*Inflation in Brazil exceeded estimates (10.54%) in light of pressures caused by the conflict in Ukraine; expectations of increased rates and inflation growth in the United Kingdom.

*A worsening in the Russia-Ukraine conflict could accelerate flight of capital in emerging economies: IIF.

*China shut down schools in Shanghai due to a new COVID-19 outbreak; cases in the country reached their highest level in 2 years.

Economic environment

Biden announced the end of normal trade relations with Russia. According to recent news reports, Biden`s administration is ready to announce the end of normal trade relations with Russia today, which would put an end to the “most favored nation” contract, and could result in greater tariffs on imported goods from Russia. G7 member countries and the European Union are expected to do the same in efforts to continue isolating Russia`s economy due to the conflict in Ukraine – Biden will need Congress to revoke Russia`s trade status as the legislative power is the one that holds the authority to do so. This measure has received public support from Democrats and Republicans, which is why its implementation seems highly likely. The measure will allow the United States to increase tariffs on imported Russian goods above levels that are in force by other members of the World Trade Organization. For Russia, this will have a negative impact only if the EU agrees to do the same, as 33% of the country`s exports go towards the European market, while only 5% go to the United States (according to 2020 IMF data). Canada has withdrawn its deal with Russia as the most favored country and expects the EU to do the same.