EU proposes tariffs on grain from Russia to prevent “future destabilization” of domestic market

Brussels – A tariff of 95 euros per ton on the import of cereals – including wheat, corn, and sunflower meal – and 50 percent on the price of oilseeds and oil products: the European Commission today (March 22) unveiled the already announced crackdown on Russian and Belarusian agricultural products. Brussels designed the measure to “prevent destabilization of the internal market through a future significant redirection of Russian grain products” to the EU.

A senior EU official clarified that “at this stage, we do not see any destabilization.” He added, however, that if Moscow wanted to, it could do so “because of the huge increase in domestic production.” In 2023, the EU imported a record 4.2 million tons of grains, oilseeds, and derivatives from Russia, worth 1.3 billion euros, and 610,000 tons, worth 246 million euros, from Belarus. The values are rising but make up about just 1 percent of the total grain produced or imported from the EU.

In Brussels, however, there is a growing idea of the need for a decisive change of pace on protection from hybrid attacks from the Kremlin. “Russia’s role as a leading global grain exporter, coupled with its willingness to use food exports as a geopolitical tool, shows that it is high,” the European Commission explained.  The EU also hopes to counter Russian exports of grain “stolen” from occupied territories in Ukraine and relabeled as Russian. And in general, cutting off such a high source of revenue for Moscow, ultimately means limiting its ability to finance the war against Kyiv.

“We are striking the right balance between supporting our economy and agricultural communities. At the same time, we are maintaining our unyielding support for Ukraine,” commented European Commission President Ursula von der Leyen. The surcharges on Russian products – additional to the mechanism by which tariffs are applied to all non-EU countries –will not affect the transit of grains and oilseeds to third countries. The measure “will only be on tariffs that apply to products destined for consumption in the EU,” EU sources confirm. In this way, Brussels’ move should not affect food security globally, especially on the route from Europe to the African continent.

From the perspective of European consumers, “there is no risk of a major impact on prices,” qualified sources assure. Cereal prices spiked after Russia invaded Ukraine but have gradually declined back to 2020-21 levels. Cereals – although the price varies depending on quality – today cost roughly between 200 and 220 euros per ton in the EU, so a tariff of 95 euros per ton means an increase of about 40 percent. The same sources assure that – legally speaking – the EU has on its side the “possibility of invoking exemptions for security reasons under the World Trade Organization (WTO) agreement.”

The Kremlin’s response came immediately, through the words of spokesman Dmitri Peskov: “If these decisions are implemented, they will have very serious consequences for those who made them, and European consumers will suffer.” The EU Council will now consider the proposal, needing to secure  a qualified majority for adoption.