Package by package: The EU is determined to stop all trade with Russia
European countries are discussing new sanctions and other prohibitive measures against Russia, which will follow after the 17th package of restrictions, effective from May 20. There are many ideas among the proposals, including duties, up to a complete embargo on trade with Russia. Despite the harsh rhetoric, it is unlikely that the most drastic measures will be fully implemented, and even if something like this is applied, it will only lead to an intensification of relations through intermediaries. Details can be found in the Izvestia article.
17 moments of sanctions
The European Union has been increasing sanctions pressure throughout the Ukrainian conflict, but each new package of sanctions has become more and more "toothless" — unpleasant for Russia, but quite tolerable. The last packages were more demonstrative and did not create any serious problems for the economy of our country. The example of the 17th package is typical, which was agreed only after Hungary and Slovakia verified that it was "relatively weak."
At first glance, changes are visible in the context of the Istanbul meeting. The media reported that new, much tougher measures are being prepared. In particular, it may be a question of imposing duties of up to 500%, which will effectively ban all trade with Russia. This idea was put forward by U.S. Senator Lindsey Graham some time ago, and now some European governments seem ready to jump at it. The advantage of tariffs in comparison with direct bans is that they can be introduced bypassing Hungary's veto. The latter has something to lose from such actions, so it is logical to expect that Budapest will block attempts to impose radically harsh sanctions.
At the moment, the restrictions have a twofold effect. On the one hand, trade between Russia and the EU countries has declined sharply. According to Olga Belenka, head of the Macroeconomic analysis department at Finam, the trade turnover has decreased significantly compared to 2021.
"According to Eurostat, the EU imports mainly five groups of goods from Russia: nickel, fertilizers, gas, a minimum amount of petroleum products, iron and steel, that is, those goods that European countries themselves apparently still need,— she said in an interview with Izvestia.
Trading through "pads"
However, the existing figures showing a 2-3-fold drop in exports and imports between Russia and the EU should be treated with some skepticism. After the sanctions were imposed, they don't show the whole picture. Since 2022, the volume of trade through third countries has increased dramatically. The most typical example is Russian oil and petroleum products that travel to Europe via India. It turns out to be more expensive, but even with this condition, it is more profitable. This applies even more to exports. Some EU countries have increased supplies to countries like Kazakhstan and Kyrgyzstan four to five times over the past two to three years. Of course, it's not about the demand of Russia's partners in the EAEU: traffic flows were simply redirected.
It is particularly interesting that, taking into account trade with these third countries (besides Central Asia, Turkey and the UAE occupy a special place in these relations), some EU members have not reduced trade with Russia at all. Moreover, this category often includes the most ardent opponents of Russia and supporters of the toughest possible sanctions within the European Union, such as Poland and the Baltic states. The largest states of the union, Germany and France— have reduced supplies, but not as much as could be expected based on their rhetoric.
But the completely official, "white" trade is also gradually recovering. For example, gas supplies from Russia increased sharply at the beginning of 2025, by 18% compared to the same period last year. And this is against the background of news that the European Commission intends to tighten sanctions against the Nord Stream gas pipeline. In fact, without special counteraction efforts, trade relations between the EU and the Russian Federation tend to strengthen. Which is hardly surprising, given the geography.
The EU plans to compensate for this through increasingly stringent sanctions. Their financial impact can be very significant. According to Belenka, a complete loss of exports to Europe for Russia, according to Eurostat data for 2024, could cost €36 billion.
— This would mean the need to switch supplies to other export destinations, presumably with an additional increase in the price discount. For comparison, in 2021, the volume of European imports from Russia amounted to about €163 billion, the expert recalls.
Asymmetry of connections
Alexander Firanchuk, a leading researcher at the Presidential Academy, believes that in the fourth year of the sanctions standoff, it is unlikely that the European Union will decide on such drastic measures as a complete cessation of trade with Russia.
He added that Russia retains the status of a key supplier on the European market only for a limited number of product categories: Russian fertilizers account for about a quarter of EU imports, and our nickel and its products account for about one sixth. Consequently, in these positions, the substitution of Russian goods is likely to lead to noticeable price fluctuations and high relative costs at the first stages. Russia also remains an important supplier of ferrous metals and a number of other goods in the markets of individual EU countries, for example, energy resources in Hungary.
"As for the supply of European goods to Russia, they also decreased to €31.6 billion, which is almost three times the pre—sanctions level," adds Alexander Firanchuk. — Medicines (€8.5 billion), as well as machinery and equipment, and organic chemical products account for the largest share in European supplies. At the same time, in all product groups, the share of the Russian market in total EU exports does not exceed 10%, which indicates that there is no critical dependence on it.
According to Firanchuk, trade between Russia and the EU is currently balanced in value terms, but the supply structure remains asymmetric: Russian exports are dominated by raw materials, while European exports are dominated by medicines and technological goods.
— Raw materials, as a rule, have more mobility: It can be relatively easily reoriented to other markets, and on the part of importers, it can be replaced by supplies from alternative sources. As a result, substitution of Russian goods for the EU seems to be less costly than import substitution of the remaining European high-tech supplies in Russia. The most vulnerable area remains the dependence of the Russian market on the supply of European medicines," the expert points out.
In turn, Olga Belenkaya noted that if we talk about the threat of secondary protective duties from the United States for buyers of Russian raw materials, theoretically this could significantly complicate conditions for Russian exports.
— However, this initiative seems difficult to implement in practice, since it is unlikely that all major trading partner countries of Russia will comply with this. In addition, judging by Donald Trump's statements, he is not yet inclined to admit the failure of negotiations and is ready to meet with Vladimir Putin. In other words, the American administration can assess the Istanbul talks as a kind of first stage and, in order not to disrupt the negotiation process, not to impose new sanctions yet. In this case, it is unlikely that European leaders will decide to impose tough new sanctions without the support of the United States," she notes.
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