Moscow: The Russian economy, which has been isolated from the Western markets, primarily by sanctions, has escaped the immediate damages from clearing US tariffs, but the Kremlin said on Friday that additional steps need to be taken to minimize the impact of the resulting market turbulence.
President Donald Trump revealed this week a 10% baseline tariff on all imports into the United States, as well as much higher obligations of many of the country’s biggest trading partners, sparking fears of a plunge in global financial markets and a global recession.
Russia, along with Belarus, Cuba and North Korea, avoided additional tariffs – some of the world’s most heavily licensed countries. The US said sanctions imposing Ukraine’s military action “eliminate meaningful trade.”
Kremlin spokesman Dmitry Peskov said Moscow avoided punitive measures because there was no “specific” trade with Washington due to sanctions, but authorities were monitoring global markets for potential negative effects on the economy.
US figures show that commodity trade between the two countries was $3.5 billion last year. This is down from $36 billion in 2021, the year before the full-scale conflict in Ukraine began.
“We see very high levels of turbulence in the international market,” Peskov said. “We have heard extremely unfavourable predictions from a variety of economists, including the world-renowned economists who are pessimistic about this latest news.”
“Let me just say that in a storm like this we need to be extremely careful to minimize the negative impact on the economy,” Peskov said.
Louvre Little has changed despite oil prices
The Russian ruble changed little against the US dollar and Chinese yuan, the most traded foreign currency in Russia, despite turmoil in the global forex market and the decline in the US dollar against other currencies.
It also did not respond strongly to a 2% drop in oil prices, the main export commodity of Russia. The ruble has increased 25% since the start of the year, primarily as it hopes to ease tensions with the US
“The ruble is exempt from global currency fluctuations,” said an analyst at BCS Express Securities.
Some Russia praised Trump’s actions.
“President Trump’s tariff strategy reflects an increasing shift in economic sovereignty and national interests,” said Kiril Dmitriev, the Kremlin envoy for international economic cooperation, who visited the United States this week for a meeting with US officials.
“By prioritizing domestic industries and correcting structural trade imbalances, the US will set precedents for independent growth and sustainable job creation.”
Careful notes
Russia, despite rapid trade cuts, provided the US $1.3 billion worth of fertilizer in 2024, ranking it as the second largest supplier after Canada, behind Canada. Exporting fertilizers to the US has escaped sanctions, but some have already been subject to mandatory obligations.
Industry sources told Reuters that Russia’s fertilizer supply will be affected by a 10% baseline tariff in addition to its initial duties, but taxation on other suppliers is unlikely to significantly improve the position of Russian companies.
The central bank last week hit a cautious memo as it warned that declining global demand could potentially lower oil prices over several years than expected.
“Increasing import tariffs in the US and retaliation measures by other countries have posed the risk of slowing global economic growth and accelerating inflation,” Russian regulators said.
