Russia

Author: Karen Taylor
International Trade Analyst

Change in 2015 from 2014:

  To view changing data, mouseover the graphic below.

  • U.S. total exports: Decreased by $3.7 billion (34 percent) to $7.1 billion
  • U.S. general imports: Decreased by $7.1 billion (30 percent) to $16.6 billion
  • U.S. trade deficit: Decreased by $3.4 billion (27 percent) to $9.5 billion

U.S. Total Exports

The poor economic conditions in Russia in 2015 caused U.S. exports to fall by 34 percent overall with large declines in nearly every sector. Russian GDP, heavily reliant on exports of commodity products (especially crude and refined petroleum products and natural gas), shrank by 3.7 percent in 2015. The GDP declined primarily because of the sharp global decrease in energy prices since 2014 and international economic sanctions imposed on Russia in July 2014.1 

As a result of low petroleum prices, the average ruble exchange rate depreciated by 37.4 percent with respect to the U.S. dollar in 2015, causing household purchasing power in Russia to decline by 9.6 percent. (The ruble also fell against the euro by a similar rate.) The decline in household purchasing power is the first Russia had experienced since the 2008 global financial crisis.2

The U.S. Department of State notes: “The U.S. government does not recognize Russia’s attempted annexation of Crimea in March 2014. That annexation, along with Russia’s incitement of and involvement in conflict in Eastern Ukraine, has led the United States and other countries to place economic sanctions on both individuals and entities in the Russian banking and energy sectors.”3 These sanctions restricted Russia's access to global financial markets, restricted capital inflows, increased capital costs, and adversely affected Russian businesses' ability to import.4

Transportation equipment was the largest U.S. export sector to Russia in 2015 (table RU.1). Most of the declines in exports were in motor vehicles (down $1.2 billion), aerospace equipment (down $438 million), and construction and mining equipment (down $400 million) (table RU.2). Sales of passenger cars and light commercial vehicles in Russia decreased by 36 percent in 2015 due largely to the drop in Russian consumers' purchasing power.5 Russian airlines reduced their fleets as flying became prohibitively expensive for many Russian consumers. About 90 percent of airplanes flown by Russian airlines are foreign made and U.S. aircraft deliveries by Boeing to Russia fell from 12 aircraft in 2014 to 7 in 2015.6

Table RU.1: Russia: U.S. total exports, general imports, and merchandise trade balance, by major industry/commodity sectors, 2011–15

 
Million $
 
Item 2011 2012 2013 2014 2015 Absolute change,
2014–15
Percent
change,
2014–15
U.S. total exports:              
    Agricultural products 1,293 1,710 1,322 942 419 -523 -55.5
    Forest products 93 73 82 77 48 -29 -37.2
    Chemicals and related products 977 1,111 1,146 989 783 -206 -20.9
    Energy-related products 236 225 193 92 261 169 184.5
    Textiles and apparel 114 96 157 188 95 -92 -49.2
    Footwear 2 2 6 7 4 -3 -41.7
    Minerals and metals 255 268 307 334 273 -61 -18.3
    Machinery 1,410 1,829 1,753 1,628 1,258 -369 -22.7
    Transportation equipment 2,819 3,905 4,818 5,176 2,876 -2,300 -44.4
    Electronic products 959 1,303 1,116 1,103 902 -201 -18.2
    Miscellaneous manufactures 134 139 180 163 140 -23 -14.0
    Special provisions 27 34 63 55 26 -28 -51.8
        Total 8,318 10,695 11,145 10,753 7,087 -3,666 -34.1
U.S. general imports:              
    Agricultural products 382 321 396 391 382 -9 -2.2
    Forest products 112 128 172 166 171 6 3.3
    Chemicals and related products 1,854 1,388 1,524 1,527 1,590 63 4.1
    Energy-related products 26,425 22,212 20,475 14,820 9,380 -5,439 -36.7
    Textiles and apparel 5 5 6 7 12 5 63.0
    Footwear 1 2 2 2 2 1 29.0
    Minerals and metals 4,988 4,388 3,517 5,633 3,584 -2,049 -36.4
    Machinery 68 95 82 107 112 4 4.1
    Transportation equipment 225 226 294 313 417 104 33.3
    Electronic products 67 82 78 86 70 -16 -18.5
    Miscellaneous manufactures 458 379 364 509 323 -186 -36.5
    Special provisions 34 139 176 97 517 420 432.7
        Total 34,619 29,365 27,086 23,658 16,562 -7,096 -30.0
U.S. merchandise trade balance:              
    Agricultural products 911 1,389 926 551 37 -514 -93.3
    Forest products -19 -56 -90 -89 -123 -34 -38.7
    Chemicals and related products -877 -277 -378 -538 -807 -269 -50.0
    Energy-related products -26,189 -21,986 -20,282 -14,728 -9,119 5,609 38.1
    Textiles and apparel 110 91 151 180 83 -97 -53.7
    Footwear 1 1 5 5 2 -3 -65.3
    Minerals and metals -4,734 -4,120 -3,209 -5,299 -3,311 1,988 37.5
    Machinery 1,342 1,734 1,671 1,520 1,147 -374 -24.6
    Transportation equipment 2,594 3,679 4,525 4,863 2,459 -2,404 -49.4
    Electronic products 891 1,221 1,038 1,018 832 -186 -18.2
    Miscellaneous manufactures -324 -240 -184 -346 -183 163 47.1
    Special provisions -6 -105 -113 -43 -491 -449 -1,053.5
        Total -26,301 -18,670 -15,941 -12,905 -9,475 3,430 26.6

Source: Compiled from official statistics of the U.S. Department of Commerce for the 2011–15 period. These reflect all official revisions of previously published data up to June 2015 (accessed February 19, 2016).
Note: Import values are based on Customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data. Sectors are ordered by the level of processing of the products classified within each sector.

Table RU.2: Russia: Leading changes in U.S. exports and imports, 2011–15

 
Million $
 
Item 2011 2012 2013 2014 2015 Absolute change,
2014–15
Percent
change,
2014–15
U.S. total exports:              
    Decreases:              
      Transportation equipment:              
        Motor vehicles (TE009) 552 880 1,322 1,559 340 -1,220 -78.2
        Aircraft, spacecraft, and related equipment (TE013) 749 1,489 1,961 2,358 1,920 -438 -18.6
        Construction and mining equipment (TE004) 982 1,030 870 562 163 -400 -71.1
       Farm and garden machinery and equipment (MT009) 342 444 305 256 100 -157 -61.2
      Agricultural products:              
        Poultry (AG005) 245 304 307 142 0 -142 -100.0
        Swine and pork (AG003) 204 260 16 136 1 -135 -99.6
    All other 5,244 6,289 6,364 5,739 4,565 -1,174 -20.5
        Total 8,318 10,695 11,145 10,753 7,087 -3,666 -34.1
U.S. general imports:              
    Decreases:              
      Petroleum products (EP005) 16,799 17,305 17,613 13,135 7,742 -5,392 -41.1
      Minerals and metals:              
        Ingots, blooms, billets, and slabs of carbon and alloy steels (MM025A) 533 892 720 1,508 608 -899 -59.6
        Plates, sheets, and strips of carbon and alloy steels (MM025B) 235 201 24 588 79 -509 -86.6
    All other 17,051 10,966 8,729 8,428 8,132 -295 -3.5
        Total 34,619 29,365 27,086 23,658 16,562 -7,096 -30.0

Source: Compiled from official statistics of the U.S. Department of Commerce for the 2011–15 period. These reflect all official revisions of previously published data up to June 2015 (accessed February 19, 2016).
Note: Import values are based on Customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data.

The decline in U.S. exports of construction and mining equipment was concentrated in exports of two products; parts for oil and gas field machinery (down $157 million to $54 million in 2015, a decline of 74 percent) and mobile drilling derricks (down $47 million to zero in 2015). These two products accounted for almost half of the $400 million export decline in construction and mining equipment. U.S. sanctions on Russia prohibit the export of goods in support of deepwater, Arctic offshore, or shale projects, as the sanctions were intended to impede Russia's ability to develop frontier and unconventional petroleum resources—a sector in which Russian companies are heavily dependent on Western technology.7

Machinery was the second-largest U.S. export sector, and lower exports of farm equipment contributed to the sector's overall decrease. The United States is a significant supplier of agricultural equipment to Russia and is home to three of Russia’s leading foreign suppliers of agricultural equipment: John Deere, CNH, and AGCO.8 Reportedly Russia greatly needs modern agricultural equipment, as much of its current supply is inadequate or outdated. U.S. exports of agricultural equipment nonetheless fell due to the deteriorating Russian economy.9

U.S. agricultural product exports saw the largest percentage decrease (down 56 percent), with most of the drop accounted for by declines in exports of poultry, swine, and pork. In response to sanctions imposed on Russia by the United States and other countries, Russia banned the importation of certain beef, pork, poultry, fish and seafood products, fruits and nuts, vegetables, and prepared foods from the United States, the European Union (EU), Canada, Australia, and Norway for one year beginning August 14, 2014. In June 2015, the ban was extended until August 5, 2016.10 As a result, U.S. exports of many of these goods fell to zero or near zero in 2015.

U.S. General Imports

U.S. imports from Russia were primarily energy products, which accounted for 57 percent of the total, and minerals and metals, which accounted for 22 percent. The energy products that the United States imported consisted mostly of petroleum products. The import decline in energy products and in the minerals and metals sector is primarily responsible for the 30 percent ($7.1 billion) decline in overall U.S. imports from Russia.

Although U.S. imports of petroleum products from Russia decreased in value from $13.1 billion in 2014 to $7.7 billion in 2015, the quantity of these imports actually increased from 123.5 million barrels to 134.5 million barrels. A sharp drop in the price of petroleum products accounted for the decrease in import value during 2014–15; the average value of imported petroleum products from Russia was $106 per barrel in 2014 but only $58 per barrel in 2015. Most of the petroleum products from Russia are unfinished oils.11

The import decrease in the minerals and metals sector was due primarily to declining imports of flat steel products (e.g., plate, sheet, and strip) and of semifinished steel products (e.g., slabs and billets). Hot-rolled sheets of carbon steel are a major product group, and an agreement suspending the imposition of antidumping duties on hot-rolled steel sheet imports from Russia was rescinded in December 2014.12 As a result, antidumping duties ranging from 73.59 percent to 184.58 percent were imposed on imports of these products from Russia.13

Few U.S. steel mills import large amounts of semifinished steel for conversion to finished steel products. Two U.S. steel mills that do import slabs from their parent companies in Russia for this purpose are EVRAZ North America and NLMK USA. EVRAZ produces pipe used in oil and gas fields at its Portland, OR, operations, and NLMK USA produces hot-rolled coil, which is the substrate for oil country tubular goods. As a result of falling energy prices in 2015, both companies were adversely affected by the significant decrease in U.S. oil and gas drilling and exploration (a significant end user of pipe).14

U.S. Trade Balance

The U.S. trade deficit with Russia shrank by $3.4 billion (27 percent) to $9.5 billion as the decline in U.S. imports from Russia outpaced the decline in U.S. exports. The decrease in the value of U.S. imports was primarily due to the sharp drop in petroleum product prices, despite higher levels of imports of petroleum products in volume terms.15

 

1 In 2015, the oil and gas sector accounted for 43 percent of Russian government revenue. Lee, “Why the Russian Economy Is Tumbling,” April 12, 2016; World Bank, The World Bank- Russian Federation Partnership, April 2016, 1.
2 World Bank, The World Bank-Russian Federation Partnership, April 2016, 1.
3 USDOS, Bureau of Economic and Business Affairs, “2015 Investment Climate Statement—Russia,” May 2015, 3; U.S. Treasury, “Announcement of Expanded Treasury Sanctions,” September 12, 2014.
4 World Bank, The World Bank-Russian Federation Partnership, April 2016, 1.
5 Association of European Businesses, “Year 2015 Ends with 35.7% Car Market Decrease,” January 14, 2016; Moscow Times, “Russian Car Sales Down 36% in 2015,” January 14, 2016.
6 Bloomberg, “Shrinking Russia Jet Fleet Threatens,” May 13, 2015; Boeing, “Orders and Deliveries,” http://www.boeing.com/commercial/#/orders-deliveries, for deliveries to Russia during January–December 2014 and January–December 2015. 
7 U.S. Treasury, “Announcement of Expanded Treasury Sanctions,” September 12, 2014.
8 USDOC, “Russia Country Commercial Guide: Market Opportunities,” April 17, 2016.
9 Ibid.
10 USDA, FAS, Russian Federation: Food Processing Sector, January 22, 2016; USDA, FAS, Russia Bans Key U.S. Agricultural Exports, August 8, 2014.
11 Unfinished oils are produced by partial refining of crude petroleum and include naphthas and lighter oils, kerosene and light gas oils, heavy gas oils, and residuum. See the “Energy and Related Products“ webpage for a more detailed discussion of the price decline for petroleum products.
12 In 1999, the Department of Commerce and the USITC made affirmative determinations on dumping and injury to the U.S. industry, respectively, in regard to imports of hot-rolled steel from Russia. Effective July 1999, the antidumping duty investigation was “suspended” and an agreement between the governments of Russia and the United States was negotiated which implemented an export quota and a price floor on imports of hot-rolled steel from Russia while “suspending” antidumping duties. Either party could rescind the agreement, but doing so would immediately impose antidumping duties on the imports. In December 2014, the United States rescinded the agreement and the antidumping duties were imposed.
13 Federal Register, “Termination of the Suspension Agreement on Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, Rescission of 2013–2014 Administrative Review, and Issuance of Antidumping Duty Order,” 79 FR 77455, December 24, 2014.
14 Virtually all U.S. imports of semifinished steel in 2015 from Russia came through two ports: Philadelphia, PA, and Columbia-Snake, OR. The Philadelphia port is close to NLMK USA operations in Sharon, PA, and the Columbia-Snake, OR, port is close to EVRAZ North America's operations in Portland, OR. See the “Energy and Related Products“ webpage for a more detailed discussion on the decline in U.S. oil and gas exploration.
15 See the “Energy and Related Products“ webpage for additional information on energy-related product prices.