Seven of the world's leading industrial nations - Germany, Canada, France, Italy, Japan, the UK and the US - have signaled their intention to impose stricter trade sanctions on Russia in response to the ongoing war in Ukraine.
The latest summit of the G7 took place at Schloss Elmau in Germany as Russia intensified its military assault on Ukraine, with an attack on a kindergarten in Kyiv and a missile strike on a shopping center in Kremenchuk.
German chancellor and current chair of the G7 Olaf Scholz said the war marked a "radical turning point in international relations". All of the countries gathered at the summit committed to new sanctions on Vladimir Putin's regime, with specific measures designed to restrict imports crucial to Russian arms production and limit exports of gold from the country.
The G7 leaders committed to the alignment and expansion of sanctions to further restrict Russian access to "key industrial inputs, services and technologies", particularly those that support the country's armament industrial base and technology sector.
A statement from the White House said the US State Department and Treasury will "aggressively target" Russian military supply chains by placing blocking sanctions on state-owned defense enterprises, research organizations and related entities. One aim of these measures is to limit Moscow's ability to replace the military equipment it has already lost following its invasion of Ukraine.
Earlier this year, a commitment was made to strip Russia of its 'most favored nation' trading status, which resulted in higher tariff rates on goods exported from the country to the rest of the world. The G7 is set to seek authority to use the revenues generated by these tariffs to support Ukraine.
The US said it would impose higher tariffs on more than 570 groups of Russian products worth approximately $2.3 billion.
Other key announcements from the recent summit included targeted sanctions on those who are found to be responsible for human rights abuses and have been involved in tactics to steal Ukrainian grain, which have exacerbated "global food insecurity".
Crackdown on Russian gold
As part of their efforts to limit Russia's revenues, G7 leaders also placed new restrictions on trade in gold, which is the country's second-largest export after energy. The UK, Canada, US and Japan all announced that Russian gold will no longer be permitted to enter their borders.
Gold was worth £12.6 billion to Russia's economy in 2021 and has proven particularly valuable to oligarchs, who reportedly rushed to buy gold bullion in an effort to shield themselves from the impact of western sanctions.
Since London is a major gold trading hub, the UK government said its sanctions will have a "huge impact on Putin's ability to raise funds" and will "ratchet up the pressure" on the Russian war machine.
Import restrictions imposed by the UK now apply to more than £13.5 billion worth of Russian exports. London has also placed sanctions on more than 1,000 individuals and more than 100 entities since the invasion of Ukraine began in February.
Chancellor of the exchequer Rishi Sunak said these measures show the UK is ready to take "tough steps" against Russia.
He added: "I am pleased that, following discussions with others in the G7 Finance Track, the US, Canada and Japan will be joining us in imposing this measure, shutting down avenues for Russian gold sales and maximizing the impact that we can have on Putin and his cronies."
The war in Ukraine has triggered various economic and trade consequences that countries around the world are struggling to manage, including soaring inflation rates and concerns around energy and food supplies.