Russia can respond to new U.S. sanctions by restricting the activity of American companies

Источник: The DairyNews
The Kommersant considered the question of what Russia may respond with to new U.S. restrictive measures. Officials have so far refrained from comments regarding the responses and emphasize that the final decision will be made by the President of the country Vladimir Putin. However, according to experts, the new US sanctions may lead to restrictions in the involvement of U.S. companies in the Russian market.
In the night of Wednesday the House of Representatives of U.S. Congress by an absolute majority of 419 votes (opposed only three people), approved a bill imposing sanctions against Russia, Iran and North Korea. The bill introduces additional restrictive measures against Russian individuals, entities and entire sectors of the economy, de facto depriving the President of the United States of the ability to cancel the new and existing restrictions without congressional approval.

The Head of the Federation Council Committee on international affairs Konstantin Kosachev said that “the reaction should not be symmetrical, but painful for the Americans”.

"Development of proposals in this area is the lot of professionals and making decisions is a prerogative of the President,— he said. I have outlined the principle: it has to be not symmetrical and sensitive. That is, with the exception of areas where there is damage to our interests, and pointwise, with the sight".

Theoretically, according to "Kommersant", the economic sanctions of Moscow against Washington can be expressed in the direct cutting trade turnover, restrictions on the activities of American companies in the country and in some form of withdrawal of already made investments in Russia.

Direct trade turnover between two countries in 2016 amounted to $20.2 billion and was distributed by almost fifty-fifty. From USA to Russia there come mainly engineering products and other high-tech equipment (including equipment for energy and oil production and processing, one-third of import generally comes under the heading "secret code"). Theoretically possible limitations on exports from Russia to the US can be quite sensitive, but with no less serious opposite effect.

A significant volume of exports from Russia to the United States is aluminum, but the restriction of these supplies is unlikely: they provide a quarter of sales of "RUSAL" (the subject is not commented in the company). Another significant source of supply, ferrous metallurgy, is mainly related to the promotion of Russian Steelworkers their own assets which is absolutely insignificant in the United States and for the American market. And finally, the last, relatively serious item of export - mineral fertilizers — is insignificant for both sides.

More serious could be limiting the work of American companies in Russia. Most commonly they are represented in the consumer market and in the IT that makes a prohibition relatively possible -sanctions affecting the citizens, Moscow have already been successfully tested in the case of Europe and Turkey.

The problems of McDonald's in Russia in the beginning of the Ukrainian crisis were never directly associated with the conflict with the United States, but many in the market interpreted it that way. If the situation repeats in a formal and more extensive version, it may affect a lot of industries — from food production to pharmaceuticals, catering and Internet services.

Coca-Cola and PepsiCo are absolute leaders in the production of non-alcoholic beverages: the companies in Russia have their own enterprises for the production of soda and juices. PepsiCo is also one of the country's largest producers of dairy products (brands "Domik V derevne", "Chudo") and snacks (Lay's, Cheetos). The significant shares the Americans have on the confectionery market — the companies Mondelez and Mars are working there. The latter is also the leader of the Russian market for pet food (Pedigree, Whiskas) with a share of 53%.

American Google, Facebook, Apple, Adobe and Microsoft are not less popular in Russia.

On the market of drugs (where the ban on direct import could be effective - in 2016 pharmaceuticals to Russia from the US was supplied for almost $560 million), Abbott Laboratories is working there (in 2014 it bought major Russian pharmaceutical manufacturer "Veropharm"), Eli Lilly and global giant Pfizer, which together with "Novamedica", portfolio company of RUSNANO, is building a plant for the production of injection medicines in Kaluga region.

The seizure of numerous assets of American companies in Russia, at least direct, and not through a forced exit due to business constraints, looks the least realistic scenario.

According to experts interviewed by the "Kommersant", the state of the economy, still dependent on scale war of sanctions with the United States,.

Read full article in Russian on DairyNews.ru
30.01.2024
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