Cars and aircraft could be next target for Russian sanctions
Russia could hit back against Western nations with bans on imported cars if the US and the EU and introduce additional sanctions, Russin newspaper Vedomosti has reported.
Russia's involvement in Ukraine has already led to a host of sanctions being imposed, including measures against the energy and finance sector and travel bans for top officials.
The paper reports that imported vehicles accounted for 27 per cent of sales of Russian passenger cars in the first six months of 2014, with truck imports making up 46 per cent, while buses accounted for 13 per cent.
However, the new ban would not apply to foreign car companies production located inside Russia, cushioning the blow for firms such as Ford and Volkswagen, which have facilities inside the Russia Federation.
Vedomosti says the plans have already been sent to President Vladimir Putin for consideration, but no final decision has been made. Aircraft and ship building industries could also come under threat.
The tit for tat trade war between Russia and the West is already having a negative economic impact on both sides.
Nina Oding, an economist at the Leontief Centre, told Russian business website RNK: "We're heading for restricted choice, more monopolistic tendencies, prices will rise – and we're already seeing the start of that process." She denounced "clumsy efforts by the state somehow to regulate price formation".
Meanwhile the European Commission has pledged emergency funding worth €125m to compensate EU farmers losing out because of Russia's ban on some EU foods. Eurozone exports to Russia were down 14 per cent in the first half of 2014 it was reported yesterday.
Agriculture commissioner Dacian Ciolos, said in a statement yesterday: "All farmers of the concerned products – whether in producer organisations or not – will be eligible to take up these market support measures where they see fit.”
Certain goods from the US, Canada, the EU and Norway and Australia were subjected to a one-year embargo earlier this month. On Monday, German Chancellor Angela Merkel pledged to support the Baltic states against a possible Russian threat but refused to give a commitment on the deployment of ground troops.