US President Joe Biden has announced a ban on imports of Russian diamonds, seafood and vodka in the latest response to Russia's war in Ukraine.
He also said Western allies plan to revoke Russia’s status as an equal trade partner, paving the way for further economic punishment.
The moves add to sanctions that have isolated Russia economically since the invasion.
Its currency has collapsed, while global firms rush to exit the country.
Russian President Vladimir Putin has likened Western sanctions on banks and oligarchs to a declaration of war. Moscow has also threatened to nationalise production plants or factories where work has been suspended.
Mr Biden said the latest steps will be "another crushing blow to the Russian economy".
Under international rules, designating a country a "most favoured nation" provides reciprocal trade privileges such as lower tariffs, taxes imposed at the border.
The US is coordinating the move to strip Russia of its status along with the European Union and other advanced economies, including Canada and Japan, which Mr Biden said would take similar steps.
"We remain resolved to isolate Russia further from our economies and the international financial system," the leaders of the G7, a group of advanced economies that includes the UK, said in a statement.
In the US, Congress, which must act for the move to go into effect, has already declared itself in favour of the move.
In addition, Mr Biden said Western allies planned to cut Russia off from accessing finance from international organisations such as the World Bank and International Monetary Fund.
Mr Biden said he was also barring US exports of luxury goods to Russia, trade worth about $550m per year, and would further sanction oligarchs and their families.
The US ban on key Russian imports will deny Mr Putin more than $1bn in revenue, the White House said.
That is just a fraction of the roughly $28bn worth of trade the US and Russia exchanged in 2019.
Stripping Russia of its favoured nation trade status clears the way for higher tariffs on key products such as mineral fuels, fertilisers and metals.
"We're going to continue to squeeze Putin," Mr Biden said. "He is the aggressor and... must pay the price."
Economists say the sanctions will throw Russia into a severe economic recession this year. But it is not clear that the economic disarray has altered Mr Putin's military ambitions.
At a press conference on Thursday, White House spokeswoman Jen Psaki was asked when the weight of the sanctions might lead to a change in Mr Putin's actions.
"Our objective of course is to bring an end to this conflict, she said. "In terms of when that will happen, I'm unfortunately not in the mind of President Putin.... When it will change his calculus, I can't give a prediction of that."