Brussels proposes steep EU tariffs on Russian grain, fearing market turmoil

The measure would apply to cereals, oilseeds and derived products, like vegetable oil, that originate in Russia and are bound to be sold in any of the 27 member states. The same products coming from Belarus, one of Vladimir Putin’s closest allies that often provides cover for his disruptive actions, would be equally subject to the regime.

Under the proposal, the EU would slap a €95-per-tonne tariff on Russian-made maize, wheat and oilseeds, which are today subject to zero duties. Other goods would be subject to an “ad valorem duty” of 50% to match the increase.

The figures are designed to discourage imports of Russian grain, which last year amounted to 4.2 million tonnes worth €1.3 billion. While this represents a tiny share of all EU imports, the Commission believes Russia has enough production capacity to dump low-cost cereals on Europe and unleash market turmoil.

The measure is essentially “preventive” as no major disturbances have been so far detected, senior officials said. However, it is also aimed at depriving Moscow of yet another source of revenue and ensuring the grain its troops have stolen from occupied Ukrainian territories does not find its way to European customers.

Russian grain that transits through the bloc’s territory to reach other countries, such as low-income nations in Northern Africa, would be exempted from the measures.

The proposal, unveiled on Friday morning, still needs to be validated by member states through a qualified majority vote. The Commission had the plans ready to go but only moved ahead with them after a meeting of EU leaders in Brussels the day before. 

“There are several good reasons for making this proposal. It will prevent Russian grain from destabilising the EU market in these products. It will stop Russia from using the revenues from the export of these goods to the European Union. And it will ensure that illegal Russian exports of stolen Ukrainian grain do not enter the EU market,” Commission President Ursula von der Leyen said on Thursday evening.

During the summit, Ukrainian President Volodymyr Zelenskyy urged leaders to take action against Russian grain.

“Unfortunately, Russian access to the European agricultural market is still unrestricted. And when Ukrainian grain is thrown on the roads or railway tracks, Russian products are still being transported to Europe, as well as goods from Putin’s controlled Belarus,” Zelenskyy said, according to a transcript of his virtual speech. “This is not fair.”

Since the beginning of the war, the question of agricultural products has become a hot-button issue with fraught political repercussions. The first shockwaves were sent after Russian troops blockaded the Black Sea and prevented Ukraine, a mighty agricultural exporter, from using its traditional trade route towards low-income nations. 

This prompted the EU to set up the so-called “solidarity lanes” and exempt all Ukrainian goods from tariffs and quotas with the goal of providing alternative solutions by land. But the project was met with backlash in neighbouring member states, namely Poland, Hungary, Slovakia, Bulgaria and Romania, which complained about a flood of low-cost, duty-free Ukrainian grain that plunged prices for local farmers and filled up storage.

Despite multiple attempts by Brussels to settle the long-running dispute, the bloc has not yet found a durable arrangement. A deal to extend the free-trade regime until 2025 was reached earlier this week, with safeguards on products such as wheat, maize, rapeseed, sunflower seeds, sugar, poultry and eggs. But soon after the agreement was struck, member states asked for more time to analyse it, throwing the process into doubt.