Potential losses are significant as Russia is the EU’s largest export market for its fruits and vegetables worth Euro 2billion annual turnover and is the second-largest export market for US poultry, accounting for 8% of US poultry exports, according to Matthew Clements, Deputy Head of Europe & CIS Analysis at IHS Country Risk.
“Moscow has also begun to target iconic Western brands. The consumer agency announced on 28 July that it initiated an investigation of cheese used at McDonald’s restaurants, and yesterday (4 August) it announced a ban on US bourbon due to sanitary concerns.
Russia will probably increase pressure by expanding bans to include consumer goods brands, including electronics and clothing.
“The announced bans against EU and US products will have limited economic impact, and are currently largely symbolic. Moscow appears to be selecting products and goods strongly associated with Western cultural identity and will probably increase pressure by expanding bans to include consumer goods brands, including electronics and clothing, which are closely associated with liberal Western values, particularly US brands.
“However, in the event of further Western sanctions being enacted, these bans may be extended and begin to have a more significant effect on imports to Russia. Moscow also may respond in other ways against Western businesses operating in Russia, which could have far more negative consequences. Revoking visas of key Western managers, increased inspections by tax and other regulatory bodies, and retroactive tax liabilities are methods that may be increasingly employed.”