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American Shipper

Russia halts host of U.S., EU imports

   Russia has imposed a ban on imports of fruits and vegetables, beef, pork, poultry, fish and dairy products from the United States, the European Union, Canada, Australia and Norway — countries that have recently imposed sanctions on Russia — for 1 year.
   U.S. exports to Russia totaled $819.7 million in June, topping $5.9 billion for the first six months of the year, according to the Department of Commerce.
   Russia is also considering disallowing European and U.S. airlines to fly over Russia when routing to Asia, along with other Russian airspace-related measures.
   President Obama Tuesday announced a larger round of sanctions against Russia, the same day the European Union voted to impose broad sanctions of their own.
   Russia’s prime minister, Dmitry Medvedev, announced the sanctions during a government meeting Aug. 7, saying Russian President Vladimir Putin signed an executive order regarding the import ban Wednesday.
   The executive order directed the government to “take measures to ensure balanced goods markets and prevent accelerating price rises for agricultural products and foodstuffs; to organize together with regional authorities timely monitoring of goods markets; and act together with associations of goods producers, retailers and organizations to take measures to increase supply of domestic goods.”   
   Medvedev did say that if the countries under the import ban make “a constructive approach towards cooperation issues,” the Russian Government might revisit its trade decision.
   “For a long time, Russia has not responded to the so-called sanctions declared against it by certain countries,” he said, according to a transcript of his speech, posted on the Russian Government’s website. “Until the last moment, we hoped that our foreign colleagues would realize that sanctions lead to a blind alley, and that no one benefits from them. But they didn’t realize this, and now we have been forced to respond.”
   The import ban starts immediately, and while Medvedev asked his Federal Customs Service to enforce the new law, he also told his ministries of trade and agriculture to start monitoring the commodity markets and pricing. The ministries will report to the government to make sure that no internal actors can derive “speculative profits from this situation,” he said.
   “I have repeatedly stated that there is nothing productive about sanctions. We had a hard time deciding on retaliatory measures, and we were forced to make this decision,” he said. “But I am confident that we’ll be able to take advantage of the situation even under these conditions.”
   According to the National Chicken Council, Russia is the second largest market by volume for American chicken. The group said 2013 exports to Russia totaled 267,000 metric tons at a value of $303 million, but that this number still only represents 7 percent of total U.S. poultry exports by volume. The organization noted that in the 1990s, poultry exports to Russia hit 40 percent, but that in today’s market, the ban on poultry doesn’t have as big of an impact.
   “The biggest impact, we believe, will be on Russian citizens who will be burdened by higher prices for all food products, especially meat and poultry,” the organization said. “Our industry believes that free and fair trade — particularly with food — should never be used as a political bargaining chip. We look forward to working with the U.S. government to resolve this issue and resume normal trade relations with Russia as soon as possible.”
   American Soybean Association President Ray Gaesser said Russia is a key trading partner with the U.S. and noted that soybeans are the biggest crop export from the U.S. to Russia. 
   “ASA pushed hard for the establishment of permanent normal trade relations with Russia last year because of the significant growth and opportunity presented in the Russian marketplace,” he said in a statement, adding that the sanctions “serve only to hurt the Russian people by limiting their access to the food and products they need and want.”
   In a statement, the European Commission called the sanctions “politically motivated” and pledged to asses the impact of the measures once more information is available.
   “We underline that the European Union’s restrictive measures are directly linked with the illegal annexation of Crimea and destabilization of Ukraine,” the commission said. “The European Union remains committed to de-escalating the situation in Ukraine. All should join in this effort. Following full assessment by the Commission of the Russian Federation’s measures, we reserve the right to take action as appropriate.”
   The Moscow Times recently examined the impact the current sanctions against Russia are having on its airline industry, finding that 90 percent of planes flown by Russian carriers are internationally leased. “Any carrier to be blacklisted could lose most of its fleet overnight,” it reported.