BRUSSELS — A coalition of seven EU nations is advocating for the implementation of tariffs on a broader range of Russian goods, signaling a decisive move in response to the ongoing conflict in Ukraine. This joint initiative, outlined in a discussion document dated Nov. 4, has garnered support from Estonia, Finland, Germany, Latvia, Lithuania, Poland, and Sweden. The countries are urging the European Commission to formulate a proposal targeting tariffs on iron and steel, inorganic chemicals, and potassium fertilizers, sectors that generated approximately €5.4 billion in export revenues for Russia in 2024, thereby facilitating its military efforts.
Growing economic security concerns
A senior EU diplomat, who chose to remain anonymous due to the sensitive nature of the discussions, emphasized the importance of reducing dependency on Russian imports as part of enhancing economic security. This sentiment echoes across the bloc, with two additional diplomats confirming the collective push for these tariffs.
In 2024, European businesses engaged in trade with Russia to the tune of €33 billion. Notably, even after excluding oil and gas from the figures, the total remains significant at €11 billion, encompassing various products such as iron and steel, nickel, fertilizers, aluminum, fish, and machinery. These transactions are currently permissible since the products involved are either exempt from EU sanctions or not subject to them.
Challenges in tariff implementation
The proposal to impose tariffs is fraught with controversy within the EU, primarily because it does not necessitate unanimous consent among member states, unlike sanctions. As a result, individual countries cannot veto the tariff measures. Germany, as the EU’s largest economy, has notably aligned itself with the eastern and northern member states, endorsing a tougher stance against the economic underpinning of Vladimir Putin’s regime.
“It is very important that Germany is on board this time,” the senior diplomat remarked, indicating that Berlin’s support could influence the European Commission’s stance.
While discussions are ongoing, there is speculation that an eighth country may join this coalition. However, the proposal faces opposition from several EU capitals that rely on access to inexpensive raw materials. Notably, Belgium and Czechia have negotiated exemptions for certain steel products due to the presence of Russian-owned steel plants within their borders, which complicates the tariff discussion further.
Additionally, some nations argue against tariffs on principle, asserting that such measures should fall under the sanctions policy. Pro-Kremlin governments within Hungary and Slovakia have historically obstructed sanctions packages and other legislative efforts aimed at limiting trade with Russia.
Previous tariff measures have been enacted, including those on grain and wheat last year and ammonia-based fertilizers from July. The European Commission, which is responsible for proposing any new tariffs under the EU’s decision-making framework, received the recent letter detailing the tariff request on Wednesday.
EU ambassadors deliberated on the proposal during a meeting on Wednesday, with plans to escalate the discussion to the bloc’s trade ministers at their upcoming meeting scheduled for Nov. 24. Should there be a consensus on the tariff initiative, it could pave the way for discussions with U.S. Secretary of Commerce Howard Lutnick, who is expected to attend the meeting in Brussels.