The move comes as Washington seeks to punish Russia over its annexation of Crimea and for its role in destabilizing eastern and southern Ukraine.
Obama notified the U.S. Congress on May 7 that he intends to withdraw Russia's access to the Generalized System of Preferences program, which exempts eligible countries from tariffs on certain goods.
Russia was the program's ninth-largest beneficiary last year, with $296 million in tariff discounts on goods it sends to the United States.
The White House cited Russia's "sufficiently advanced" economy as the basis for the decision.
The announcement did not specifically mention the Ukraine crisis.
But it follows U.S. sanctions against Russian officials and businesses close to Russian President Vladimir Putin's inner circle.
How do people in #Ukraine see EU influence? 33% bad; 45% good. US? 38% bad; 38% good. Russia? 67% bad; 22% good. http://t.co/IZqZby68t9
— Paul Sonne (@PaulSonne) May 8, 2014
#Donetsk referendum graffiti still evident but will it still be relevant by Sunday ? pic.twitter.com/OBdBaZSMoX
— Eleanor Montague (@EleanorMontague) May 8, 2014
Ukraine says military ops against rebels to continue despite Putin's comments yesterday. This might not be over yet.
— Richard Carter (@rdcberlinAFP) May 8, 2014
Outside Donetsk Republican Headquarters they want the referendum to go ahead: "Putin can say what he likes. We'll decide for ourselves."
— Gabriel Gatehouse (@ggatehouse) May 8, 2014
I have very good vision but while we've noted #Russia’s statement so far we haven't seen any - any - indication of troops pulling back
— AndersFogh Rasmussen (@AndersFoghR) May 8, 2014
If we saw visible signs of a meaningful pullback by #Russia troops I'd be the first one to welcome it
— AndersFogh Rasmussen (@AndersFoghR) May 8, 2014
RT @russian_market: Referendum will be held on May 11 and not postponed any hour or any second - Separatists.
— Mark MacKinnon (@markmackinnon) May 8, 2014
When you think this conflict can't get more baffling, behold the militant+the pup. What message is he trying to send? pic.twitter.com/4RhskkbMzB
— Clarissa Ward (@clarissaward) May 8, 2014
Amazing! RT @NoahSneider : @clarissaward emulating someone? pic.twitter.com/YJ5TGQVfQT”
— Clarissa Ward (@clarissaward) May 8, 2014
Ukrainian National Security and Defense Council Secretary Andriy Parubiy said the "antiterrorist operation" will proceed even if the leaders of the self-declared "Donetsk People's Republic" decided to postpone plans for a referendum on self-determination due on May 11.
Ukrainian forces have retaken some of the government offices captured by the separatists in about 12 cities in eastern Ukraine.
Russian President Vladimir Pution called yesterday for separatist leaders in Ukraine's Donetsk and Luhansk regions to delay the holding of such referendums.
Separatist officials said they will consider Putin's request.
Putin spokesman Dmitry Peskov said on May 8 that the Kremlin is awaiting the "results of a people's assembly in Donetsk" that he says will decide on whether to hold the referendum.