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We will respond: Russia warned of countermeasures if G7 imposes a ban on exports to Russia

Photo by A. L. on Unsplash

Moscow will retaliate in case the G7 countries impose a complete ban on the supply of goods to Russia. This was announced by Russian Foreign Ministry spokeswoman Maria Zakharova at a briefing on Thursday, April 27.

“If new sanctions are imposed, we will react, but we will react – as always – thoughtfully, balanced, weighed, guided by the tasks of protecting our interests, citizens, maintaining the stability of the national economy, the interests of domestic business … There is a clear understanding of how to act,” Zakharova said.

According to her, the West with its restrictions undermines generally accepted principles of multilateral trade and depreciates the norms of sovereign equality. Zakharova noted that the main initiator of the sanctions – the United States – is not concerned about the negative consequences of the restrictions imposed against Russia, because all the negative consequences primarily affect the European Union.

“The U.S., spinning the sanctions spiral against Russia, actually uses methods of unfair competition in relation to its European allies… Analysts openly discuss the threat of deindustrialization of Europe due to the reduction of its competitiveness… And who in Washington will think about any other states?” – added the Foreign Ministry spokeswoman.

Meanwhile, Russia intends to further develop cooperation with reliable partners, said Zakharova. According to her, economy will keep adapting to new financial and foreign trade conditions.

After the start of a special military operation in Ukraine in 2022, the United States, together with the EU and a number of other states have already introduced more than 12,600 trade, financial and other restrictions against Russia. This is evidenced by the materials of Castellum.AI, a global database for tracking sanctions.

Restrictions, in particular, affected the supply of a number of Western products to Russia. Meanwhile, according to a study by the American Institute of International Finance (IIF), to date, Moscow has successfully replaced these goods, mostly with imports from China. Against this background, the West is still trying to find a way to increase the sanctions pressure on Russia.

In particular, according to the Financial Times, Washington proposed to its G7 partners to introduce a complete ban on the export of goods to Russia. However, as the publication specifies, Japan and European countries have not yet supported this initiative.

Such proposals from the U.S. are more “like pre-emptive rhetoric” in order to see how Moscow and other countries would react, said Director of the Center for Conjunctural Research of the Institute of Statistical Studies and the Economics of Knowledge: Georgy Ostapkovich. However, according to the expert, it will be problematic to completely stop exports to Russia.

“The G7 countries supply us with technology, so the export ban may create certain difficulties for the Russian economy. However, there are always loopholes and restrictions can be bypassed. Our market as a whole is quite profitable and attractive for the West, and therefore some companies from these countries will continue to sell their goods to us by detours, including through states that are friendly to us,” Ostapkovich explained in a conversation with .

In general, the expert believes that a possible ban on exports to Russia by itself will not lead to serious losses for the “Group of Seven”. Nevertheless, Moscow’s retaliatory restrictions on critical goods could cause significant damage to the West. Dmitry Medvedev, deputy chairman of the Russian Security Council, expressed this view.

“The idea of the morons from the G7 about a total ban on the export of goods to our country by default is perfect, because it also implies a counter halt to the import of goods from our country in the most sensitive categories for the G7. In this case, the grain deal and many other things they need will end for them. They have no brains left at all, apparently,” Medvedev wrote in his Telegram channel.

According to Georgy Ostapkovich, today Western countries actively refuse to buy oil and gas from Russia, but are still quite dependent on Russian nuclear enrichment products. In addition, the G7 states buy large quantities of fertilizers from Moscow, so they refrain from imposing restrictions against these supplies, Valery Emelyanov, a stock market expert at BCS World Investment, told .

“Fertilizer supplies are a sensitive topic for Western countries. They would not want to upset the balance and create a deficit of salts, on which the yield of the same wheat depends. Also, Russian titanium and uranium are not subject to sanctions, for the same reasons as fertilizers. All these products are quite important, so I don’t rule out that Russia could retaliate by banning the sale of both titanium and all types of nuclear fuel,” Yemelyanov suggested.

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It is noteworthy that, as the sanctions pressure intensified in 2022, a number of experts initially predicted a double-digit collapse of the Russian economy. Nevertheless, according to the International Monetary Fund, the real decline of GDP from January to December was only 2.1% and was even less profound than in the pandemic 2020 (2.7%) and crisis 2009 (7.8%). Moreover, according to various estimates, already in 2023 the indicator may return to the positive trajectory and add from 0.7 to 2%.

“Our economy is now recovering steadily. Now even international organizations are predicting more positive dynamics for us in the next two years. So, this month the IMF improved its assessment of the growth of the Russian economy almost twice,” Russian Prime Minister Mikhail Mishustin said the day before.

As emphasized by the head of the Cabinet, the economic situation in the country was far from the disaster, which perhaps was expected by ill-wishers. Curiously, the U.S. itself now recognizes the failure of sanctions imposed on Moscow. Thus, according to the chairman of the Federal Reserve System (which serves as the U.S. central bank), Russia managed to avoid the harshest consequences of the sanctions.

Moreover, as the head of the Federal Reserve noted, Eastern European countries, such as Poland, suffered the most from the sanctions imposed against Russia, while the U.S. itself avoided serious consequences for the most part. Nevertheless, the overall situation in the U.S. remains difficult as well, added Jerome Powell.

Against the backdrop of anti-Russian restrictions and, in particular, a refusal to buy energy from Moscow, the U.S. was faced with the highest inflation rate in 40 years. The Federal Reserve was forced to sharply raise its interest rate in order to fight the rise in prices. Although the actions of the regulator somewhat eased the inflationary pressure, the Fed’s policy was one of the causes of the banking crisis that broke out in the country. Moreover, with high interest rates, the U.S. economy could go into recession in 2023.

“As for this year, most forecasts say the U.S. economy will grow, but at a fairly low rate – less than 1 percent growth. But a recession is just as likely as very slow growth … When growth is already very slow, any shock or negative event – whether it’s a new strain of coronavirus or events in Ukraine – could push the U.S. economy into recession,” Powell said.

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