EU plans to slap tariffs on grain to 'choke off' Russian revenue
A crane loads wheat grain into the cargo vessel Mezhdurechensk before its departure for the Russian city of Rostov-on-Don in the course of the Russia-Ukraine conflict in the port of Mariupol, Ukraine, Oct. 25, 2023.


The European Commission is moving to impose tariffs on grain and related imports from Russia and Belarus, seeking to prevent Moscow from using farm products as a tool to wreak havoc on the EU market.

Moscow responded immediately by saying Europeans would "suffer" from the move.

The tariffs are also aimed at denying Russia revenue because they will effectively suppress exports to the EU, the commission said.

The added sanctions, welcomed by Kyiv, will not apply to Russian grain transiting through the European Union to other markets to not disrupt food supplies elsewhere, EU Trade Commissioner Valdis Dombrovskis said.

"Today's proposal will choke off another important source of revenue for the Russian government to fund its illegal war of aggression against Ukraine," Dombrovskis noted.

Ukrainian President Volodymyr Zelenskyy complained to the EU leaders meeting in Brussels Thursday, via video link, that it was not fair that Russian grain continued to have "unrestricted" access to their markets, while Ukrainian imports were being limited.

Imports of cereals, oilseeds and derived products from Russia and its Belarus ally are just about 1% of the overall size of the EU market, with domestic suppliers providing the bulk.

But with angry farmers already worried by the increase of cheap Ukrainian imports, the EU fears Russia will be encouraged to take advantage of the tense situation to further destabilize the 27-nation bloc.

"This shortfall in supply will be filled partially by EU’s domestic production and, therefore, benefit EU farmers who will be able to sell in the EU," the commission said.

"In addition, the shortfall is expected to be partially filled by imports from third countries which traditionally supply the EU market such as the U.S., Brazil, Ukraine, Serbia or Argentina."

Moscow warned against the plan.

"Consumers in Europe would definitely suffer," Kremlin spokesperson Dmitry Peskov said.

EU imports of cereals, oilseeds and derived products from Russia including wheat, maize and sunflower meal were 4.2 million metric tons in 2023, worth 1.3 billion euros ($1.41 billion). In comparison, EU suppliers provide 300 million metric tons per year.

The tariffs are designed to be high enough to discourage Russian imports.

"Our proposed prohibitive tariffs will make imports of these products commercially unviable," Dombrovskis said. "It will also help put a stop to the Russian practice of illegally exporting stolen Ukrainian grain into the EU."

Under World Trade Organization rules, virtually all Russian grain has until now been exempt from EU import duties.

Under the European Commission’s plan, which can be adopted quickly since it only requires around two-thirds of member countries to agree, the duties will either reach 95 euros per metric ton or increase prices by at least 50%.

In addition, Russia and Belarus will also no longer have access to any of the EU’s WTO quotas on grain that offer better tariff treatment for some products.

"We propose the imposition of tariffs on these Russian imports to mitigate the growing risk to our markets and our farmers," European Commission President Ursula von der Leyen said.

"They will reduce Russia’s capacity to exploit the EU for the benefit of its war machine. And we maintain our commitment to preserving global food security, especially for developing countries."

In support of Ukraine in the war against Russia, the EU has imposed several rounds of sanctions on Moscow. The measures have targeted the energy sector, banks, the world’s biggest diamond mining company and other businesses and made Russian officials subject to asset freezes and travel bans.

World food prices hit record levels as a result of the Russian invasion of Ukraine combined with other factors but have since fallen from record highs in 2022.

While the EU did not ban exports of Russian food or fertilizers to non-EU nations as part of its sanctions packages, Moscow blamed the EU for the global food shortage.

EU officials said the tariffs on Russian grain will not affect trade with third countries, and that the transit through the EU will remain unhindered.

"The proposed tariffs will therefore not affect global food security, particularly for developing countries," the commission said.

"On the contrary, they are expected to create an incentive for Russia to export to non-EU destination markets, including developing countries."