Behind wide-closed doors: the Russian Foreign Ministry allowed the termination of trade with the EU

Russian Deputy Foreign Minister Alexander Grushko believes that trade with the European Union may come to naught. In 2025, the volume should reach only about $40 billion, whereas during stable relations it was $417 billion. How likely the scenario of a complete cessation of trade is and how it will affect Moscow and Brussels is described in the Izvestia article.

A rational approach

Russia is committed to mutually beneficial and pragmatic cooperation with all countries, including the EU, the press service of the Ministry of Economic Development told Izvestia.

"Indeed, since the escalation of relations, the EU's share in Russian foreign trade has noticeably decreased. If in 2021 the European Union accounted for more than a third of Russia's trade turnover (36%), then in 2024 the figure decreased to 11%. Taking into account the constantly introduced and updated packages of sanctions, we expect a further reduction in the EU's share in trade," the ministry added.

Photo: Global Look Press/Stefan Sauer/dpa

Traditionally, the EU has been Russia's largest trading partner, Alexander Daniltsev, director of the HSE Institute of Trade Policy, reminded Izvestia. The mutual trade turnover reached its maximum in 2013. Then, both imports and exports declined overall, although they experienced some fluctuations. At the same time, export dynamics largely depended on energy prices, which have always been and remain the main commodity group in Russian exports to the EU.

— Russia's imports from the EU included equipment until 2022, and in recent years pharmaceutical products have become the main commodity group of imports from the EU, with equipment taking the second place. It should be noted that the EU's share in Russian trade has been declining for a long time — for almost 20 years," the expert said. — Despite the fact that the EU remained the main trading partner of the Russian Federation, the share of trade turnover between the Russian Federation and the EU in total Russian trade has been decreasing since 2006 — from 56% in the specified year to 36% in 2021 and 12% in 2024. This was primarily due to the development of trade with other partners, that is, its geographical diversification.

Photo: Global Look Press/IMAGO/Arnulf Hettrich

Of course, according to him, the sharp reduction in mutual trade after 2021 was primarily caused by sanctions pressure. If the EU has always been the most important partner for the Russian Federation, then the role of the Russian Federation in EU trade is significantly less — it did not exceed 4% for imports, and 4% for EU exports. At the same time, the economies of the EU and the Russian Federation have always complemented each other well.

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The future of relationships

Due to the EU's sanctions policy, trade prospects appear unfavorable, although EU enterprises remain interested in a number of Russian goods, such as energy and fertilizers, Alexander Daniltsev believes. At the same time, the positions of individual EU countries on trade with Russia differ significantly, especially on the import of Russian energy products. In general, future prospects will depend primarily on the political position of Brussels and, to some extent, on energy prices, if supplies persist. It is very difficult to accurately predict such factors.

It is unlikely that the trade turnover between the EU and Russia will approach zero in the near future, Rafael Abdulov, associate professor of Economics at NUST MISIS, told Izvestia. The fact is that countries such as Hungary, Slovenia, Greece, and Italy cannot abandon Russian gas due to the lack of alternative supplies. Belgium, France, and the Netherlands have abandoned pipeline gas, but increased LNG supplies in 2024. Petroleum products are also delivered to European consumers, but not directly, but through the UAE, Saudi Arabia, and India.

Photo: TASS/Nikolay Mikhalchenko

— European goods also arrive in Russia through parallel imports. Trade turnover through third countries is not taken into account by official statistics, which means that official data on trade turnover are underestimated. In the long term, there will be a decrease in trade turnover between the EU and Russia, as the European Union is gradually being replaced by China. For example, more than half of the cars and trucks sold are Chinese—made. The same can be observed in the sale of industrial equipment, microelectronics and other goods," the expert noted.

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A complete cessation of trade with the European Union seems extremely unlikely, Alexander Firanchuk, a leading researcher at the Center for International Trade Studies at the Presidential Academy, confirmed in an interview with Izvestia. For the past two years, imports from the EU have been declining, but very slowly.

— We can talk about reaching a new equilibrium level of trade after a sharp collapse in the first year of the sanctions standoff. The Russian market continues to receive poorly replaceable European goods. First of all, this concerns medicines: the volume of their import from the EU consistently amounts to about $10 billion per year, which corresponds to the pre—sanctions level," he said. — It can be argued that Russia is still heavily dependent on the import of medicines, pharmaceutical substances and medical equipment from the European Union.

Photo: IZVESTIA/Sergey Lantyukhov

At the same time, according to him, there remains a scenario in which official direct trade will be stopped and supplies will continue through third countries. Similar schemes are already in effect. Their scale is estimated in different ways, but the fact of their existence is beyond doubt.

— It should also be borne in mind that the EU's dependence on supplies from Russia is much lower: Russian exports to EU countries are mainly represented by homogeneous goods, which are much easier to replace than high-tech products such as pharmaceuticals or medical equipment, which already account for a quarter of European supplies. However, this means that it is easier for Russian exporters to replace this market now compared to the situation in 2022," stressed Alexander Firanchuk.

Photo: Global Look Press/Holger Weitzel/imagebroker.com

The artificially created decline in trade between Russia and the EU gives an impetus to import substitution, Kirill Lysenko, an analyst on sovereign and regional ratings at the Expert RA agency, told Izvestia. There are additional incentives for Russian businesses to immerse themselves in many high-tech industries, the main niches in which were previously occupied by Western goods and services. As a result, there is a mobilization of expert and technological potential and an increase in demand for highly qualified personnel. And in the medium term, this should be a factor in slowing down the "brain drain" from the country.

— On the other hand, Russia is losing a large, close and understandable market for sales and purchases in many areas. Moreover, the loss of this market, along with the simple effects on supply and demand, also limits the access of Russian organizations to a number of advanced European technologies and expert solutions, since Russia is actually disconnected from a wide variety of value chains of advanced companies from the EU, Kirill Lysenko believes.