Gaidar Institute experts on how Russia can benefit from Trump's tariff policy

Vladimir Sedalishchev suggested that the reaction of the Russian stock market against the backdrop of the collapse in Asia and Europe is relatively subdued. He noted that the fall in oil prices, although noticeable, is not as critical as in 2020, when the low price and negative quotes of WTI crude oil posed a much greater threat to the economy.

The expert pointed out that the global trade conflict could open up new economic opportunities for Russia. For example, Russian goods may become more competitive in some markets as a result of new import duties. However, risks remain, and demand for Russian exports could decline in the face of the global economic downturn.

Alexander Firanchuk added that some Russian exporters can reorient their business because of sanctions, and third countries, tired of sanction uncertainty, can begin direct supplies to Russia, but this does not exclude risks: «business comes to those countries where there are predictable and stable rules of the game».

To assess Russia’s economic future, an important aspect is the readiness of international business to believe in the stability of the Russian legal and economic environment, says Alexander Firanchuk.

If we imagine a stress scenario where Russia finds itself in a complete trade blockade, the consequences will depend on what share of imports it will be able to substitute at the expense of domestic production, Vladimir Sedalishchev noted. «If Russia had absolute technological sovereignty, the transition to autarky (a closed political and economic system that develops, in fact, without ties with other countries. — Editor’s note) would only result in a 7.5% drop in GDP and the need to increase employment by 3.6%. This is quite comparable to the working population of the new regions. If the share of unsubstituted imports is 50%, the situation becomes much worse: a 16.5% drop in GDP and a 6.7% drop in employment, provided that imports can be reduced by only 2/3 of the current volumes. If the mentioned share is even higher, the consequences will be more dramatic," he said.

On the whole, the scenario is far from reality, experts believe. They agree that the consequences for the Russian economy largely depend on further development of global trade policy and the ability of countries to adapt to changing environment.

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