Last week we noted Russia was considering banning fruit from Europe [6] (as well as various other sanctions retaliations) but this morning Vladimir Putin has come out swinging by signing 'a decree on countermeasures to Western sanctions':
- *PUTIN BANS FOOD IMPORTS FROM COUNTRIES SANCTIONING RUSSIA: IFX
- *PUTIN ORDERS GOVT TO PREVENT ACCELERATED GROWTH OF FOOD PRICES
So trade wars escalate externally and price controls internally. It appears the US (and Europe) will indeed feel "tangible losses" despite Jack Lew's promises.
Putin adds:
- *PUTIN BANS, LIMITS FOOD IMPORTS FOR YR: IFX
- *PUTIN CALLS FOR INCREASE IN DOMESTIC FOOD SUPPLIES
- *PUTIN ORDERS GOVT TO MAKE LIST OF RESTRICTED AGR. PRODUCTS
- *RUSSIAN GOVT WORKING ON LIST OF FOODS, PRODUCTS TO RESTRICT
President Vladimir Putin on Wednesday signed a decree on countermeasures to Western sanctions.
The document entitled “On the Application of Certain Special Economic Measures to Ensure the Security of the Russian Federation” prohibits or restricts, for one year, the import of certain kinds of agricultural products, raw materials and food originating in a country that has imposed economic sanctions against Russian companies and (or) individuals or has joined such sanctions.
In addition, local analysts consider all the possibilities:
“Russia’s response to Western sanctions may vary from country to country. In relations with the United States Russia may raise the question of banning US fast food outlets, which treat their customers to products harmful to health. The same applies to the marketing of PepsiCo products and genetically modified goods from the US,” the expert said.
“Some claim that tens of thousands of Russians may lose jobs in US fast food chains, while others argue that Russian businessmen are quite capable of opening a chain of domestic fast food joints selling natural fried potatoes, and not of Brazilian flour,” Delyagin said.
“In relations with the United States the most sensitive measures may be taken in the banking sphere. Also, there is a possibility of replacing Microsoft software being used at Russia’s government structures with alternative substitutes,” the analyst said.
“Also, Russia may stop letting NASA use its rockets as a means of delivering cargoes to the International Space Station, a service the United States is so much interested in. Or, if asked to go ahead with space cooperation, Moscow may address Washington with its own conditions,” Delyagin said.
“As far as Germany as Russia’s main economic partner in the European Union is concerned, the two countries have strong bonds in power engineering and the automobile industry. But Russia may as well import high precision machine tools from advanced countries in the Asia-Pacific Region, which will surely result in direct losses for German manufacturers,” the analyst said.
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US officials are not happy...
“Assuming that they take this action, it would be blatant protectionism,” Clayton Yeutter, a U.S. Trade Representative under President Ronald Reagan, said in a phone interview.
