The European Commission is planning to impose customs duties on grain imports from Russia and Belarus to prevent the two countries from disrupting European Union (EU) markets and to appease farmers who have been protesting for months due to cheap imports. The Commission stated that the tariffs are also designed to limit Russia’s ability to finance its war in Ukraine and to sell stolen grain from Ukraine.[1]
The President of the European Commission Ursula von der Leyen, “To reduce the increasing risk to our markets and farmers, we propose applying customs duties on this Russian import,” as she continued her statement:[2]
“These measures will reduce Russia’s capacity to exploit the EU for its war machine’s benefit. And we are particularly committed to maintaining global food security, especially for developing countries.”
On March 22, 2024, Russia warned the EU against not applying taxes on grain exports. Kremlin Spokesperson Dmitry Peskov stated, “Consumers in Europe will definitely suffer” regarding the proposal, labelling it “another clear example of unfair competition.” Peskov also added that Russia has many alternative export markets outside the EU for grains, oilseeds, and their derivatives. In fact, imports of cereals, oilseeds, and derived products from Russia and Belarus account for only 1% of the total size of the EU market.[3]
However, the EU, concerned about the increasing cheap imports from Ukraine, is worried that Russia may take advantage of this tense situation to further destabilize the bloc. The Commission has stated that “part of the gap is expected to be filled by imports from third countries traditionally supplying the EU market, such as the United States, Brazil, Ukraine, Serbia, or Argentina.”[4]
The EU’s imports of cereals, oilseeds, and other products from Russia, including wheat, corn, and sunflower meal, were expected to reach 1.3 billion euros (1.4 billion dollars) in value and approximately 4.2 million metric tons in 2023. EU suppliers provided 300 million metric tons of imports annually. The Commission has stated that there is a risk of increased imports due to Russia’s total wheat exports normally rising from 35 million tons to 50 million tons.[5]
While the exact value of the proposed customs duties is not immediately clear, the Commission has stated that these tariffs will be high enough to deter imports from Russia. According to the plan, the tariffs will either be 95 euros (103 dollars) per metric ton or increase prices by at least 50 percent. Russia is one of the world’s largest grain producers and the largest wheat harvester. A significant portion of the wheat goes to Egypt and Azerbaijan.[6]
Before the start of the war in Ukraine in 2022, the EU was one of Russia’s main trading partners. Ukraine, also one of the largest grain exporters, previously accused Russia of stealing thousands of tons of grain in the country’s Russian-occupied territories and shipping these products outside Crimea for global trade. In support of Ukraine, the EU implemented various sanctions against Russia. These measures targeted the energy sector, banks, the world’s largest diamond mining company, and other businesses. The EU bloc also froze the assets of Russian officials and imposed travel bans on them.[7]
The decision of the EU to impose customs duties on grain imports from Russia and Belarus has been shaped by a combination of economic and political factors. Economically, it is a measure taken to safeguard the stability of the EU market and protect its farmers. It is stated that this decision is a response aimed at limiting Russia’s ability to finance its war in Ukraine and to sell stolen grain from Ukraine. This can also be seen as a reflection of the EU’s foreign policy, as the EU supports Kiev against Russia’s aggressive policies towards Ukraine and imposes various sanctions on Russia.
It is noteworthy how Russia has reacted to this decision. The Kremlin has described the EU’s move as “another clear example of unfair competition” and warned the EU against not applying taxes on grain exports, stating that it would harm the EU’s domestic market. The Kremlin’s response to this decision is an indication of how the EU’s measure affects Russia’s economic interests.
The EU’s decision can also be viewed within a broader context of international trade and politics. By demonstrating its commitment to ensuring fair competition in international trade and protecting its own farmers, the EU’s action could have an impact on the balance of global trade. The EU’s support for Ukraine and its firm policies towards Russia highlight the bloc’s active and influential role in international relations.
In conclusion, the EU’s decision to impose customs duties on grain imports from Russia and Belarus is a significant step in terms of economic, political, and international relations. Alongside the EU’s efforts to protect its farmers, this decision should also be considered as a reflection of the EU’s foreign policy. The impact of this decision on the future of relations between the EU and Russia, as well as on global trade, could be substantial.
[1] “EU Plans to Impose Tariffs on Grain Imports from Russia, Belarus”, Al Jazeera, https://www.aljazeera.com/news/2024/3/22/eu-plans-to-impose-tariffs-on-grain-imports-from-russia-belarus, (Date of Accession: 23.03.2024).
[2] “EU Plans to Hit Russia, Belarus Grain Imports with Tariffs”, Reuters, https://www.reuters.com/markets/commodities/eu-proposes-hitting-russia-belarus-grain-imports-with-tariffs-2024-03-22/, (Date of Accession: 23.03.2024).
[3] “EU Plans to Impose Tariffs on Grain Imports from Russia, Belarus”, Al Jazeera, a.g.e., (Date of Accession: 23.03.2024).
[4] “EU to Impose Tariffs on Russian Grain”, Financial Times, https://www.ft.com/content/438dce75-98d4-4850-ba13-878de1614e03, (Date of Accession: 23.03.2024).
[5] “EU Seeks to End Russian Grain Imports With Steep Tariffs”, The Wall Street Journal, https://www.wsj.com/world/europe/eu-plans-tariffs-on-russian-grain-imports-638400ab?mod=latest_headlines, (Date of Accession: 23.03.2024).
[6] “EU Plans to Hit Russia, Belarus Grain Imports with Tariffs”, Reuters, a.g.e., (Date of Accession: 23.03.2024).
[7] “EU Plans to Impose Tariffs on Grain Imports from Russia, Belarus”, Al Jazeera, a.g.e., (Date of Accession: 23.03.2024).
