Trade turnover between Russia and the United States reached its lowest level in July since the beginning of the Ukraine conflict, according to data from the US Census Bureau. The trade turnover stood at $277.3 million, which is 11 times lower than the amount recorded in February 2022 and nearly 13 times lower than the figure for July 2021. These numbers reflect a significant decline in trade between the two countries.
The decline in trade is primarily attributed to the sweeping sanctions imposed by the US on Russia in response to its military operations in Ukraine. As a result, the US banned imports of various Russian products such as oil, diamonds, and seafood. In addition, the US enforced additional tariffs on imports of steel, aluminum products, rubber, wood, and other goods from Russia. Consequently, imports of ferrous metals from Russia to the US have almost diminished to zero.
Russian exports continue to dominate trade between the two countries, accounting for nearly 90% of the total turnover. The major exports include nuclear fuel, mineral fertilizers, and platinum group metals. These three categories accounted for $2.5 billion of the $3 billion worth of goods purchased by the US from Russia in the first seven months of 2023.
It is worth noting that the US has refrained from targeting Russia’s nuclear fuel exports as they play a crucial role in powering America’s civilian nuclear reactors. Russia was the largest supplier of enriched uranium to the US in the first seven months of 2023, accounting for about 12% of the total US uranium imports. This makes Russia the third-largest market share after Canada and Kazakhstan.
Furthermore, Russia has also maintained strong exports of platinum group metals, particularly palladium, to the US. In the entire year of 2022, shipments of palladium reached approximately $1.39 billion. Meanwhile, deliveries between January and July 2023 reached $701 million. Palladium is widely used in the production of semiconductors and has significant application in the automotive industry.
Moreover, Russia has emerged as the second-largest supplier of fertilizers to the US in 2023, exporting a record $944 million worth of products between January and July. Canada leads the list of fertilizer suppliers with $2.8 billion, while Saudi Arabia, Israel, and Qatar complete the list of the top five largest suppliers to the US.
The decline in trade between Russia and the US has had a significant impact on both economies. Russia heavily relies on exports to the US, particularly for nuclear fuel, fertilizers, and platinum group metals. The decrease in trade has created challenges for Russian businesses and has hindered economic growth. On the other hand, the US has had to explore alternative sources for imports, resulting in potential disruptions to supply chains and increased reliance on other trading partners.
As of now, it remains uncertain how the trade relations between Russia and the US will develop in the future. The ongoing geopolitical tensions, along with the imposed sanctions, have strained the economic ties between the two countries. However, the importance of Russia’s exports, especially in the nuclear fuel and platinum group metals sectors, may continue to play a significant role in maintaining trade between the two nations.