Eastern Europe

Kremlin Starts To Worry About Trump Trade Deal With China

Test field for winter wheat crops, Russia
Image by Андрюша Романов

Having finally recovered its status as an agricultural superpower in 2018, one hundreds years after the October Revolution when the Tsarist Russia was the breadbasket of Europe, the phase one trade deal signed between China and the United States is causing worry in Moscow, which sees China-US agricultural trade as a threat to its wheat exports.

“The European reaction on the US-China deal, in which China commits to boosting purchases of US goods, raises fears,” said Russian Presidential Aide Maksim Oreshkin said in an interview with the Rossiya-24 TV news channel following the World Economic Forum in Davos, reported Russian state news agency TASS.

The agreement itself is not worrisome, Oreshkin said, adding though that a number of questions remain, for example, which principle China will use for shifting from European to US products, whether those will be market principles or additional barriers will appear for European products. “That means it is a catastrophe waiting to happen, which I do not expect in 2020, of course, but starting from 2021-2022 (Russia) together with the US, China and Europe and other countries will witness many disputes,” he explained.

 “I do not think that two-sidedness is the new future for international trade policy. We in Russia definitely remain fully supportive of multilateral formats, the WTO, and I should put it very simply – what is liked by two is not necessarily liked by the third and all others,” he emphasized.

After Western sanctions began to damage the Russian economy in 2014, Moscow pivoted east to China as a buyer of its products, including agriculture and hydrocarbons. Much has been made of this shift of focus by the Kremlin, but doubts have remained in Russia regarding the trustworthiness of Chinese leaders bearing gifts.

Now that question will be tested in international markets. Will China hurt Russia by buying more American products?

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