Dan Nielsen: Russian products are affected by the invasion | Business


Dan Nielsen

The response to Russia’s invasion of Ukraine shows the interconnectedness of our world.

The near universal condemnation of the invasion is no surprise. Few national leaders – and even fewer citizens – are hungry for war. War brings fear, death and destruction. The number of people who benefit from military conflict pales in comparison to the number of those who suffer from it.

What has surprised me in recent weeks is the variety of products that the United States imports from Russia.

Looking around my house, I don’t see anything that was done there. I prefer to buy American products whenever possible, but many consumer goods in my possession come from elsewhere. Electric tools and computer chips in China. Shirts in Malaysia. Cameras and a car in Japan. Books in England. Coffee in Colombia. Olive oil in Italy. Our house could be classified as a multinational consumer society. But nothing jumps like made in Russia.

However, many Americans buy and consume products made in Russia.

Former football star Joe Namath made national television news last week by banning Russian vodka from his restaurants. Aldi, Publix and Total Wine stores said they would not sell it. States like Pennsylvania and North Carolina have proposed banning the sale of Russian vodka. New Hampshire, Ohio and Utah could follow.

The owner of Bob’s Bar in Grand Rapids has removed bottles of former Soviet brand Stolichnaya vodka from its shelves and replaced them with Vektor vodka, produced in Ukraine.

Stolichnaya for 20 years has been produced in Latvia.

Early last week, a post on stoli.com stated that “Stoli® Group has a long history of fighting against the oppression of the Russian regime. We unequivocally condemn the military action in Ukraine and support the Ukrainian people. … Stoli® vodka brands and its owner Yuri Shefler were exiled from Russia nearly two decades ago.

The company announced on Friday that it would rebrand its vodka to distinguish itself from Russia, from Stolichnaya to Stoli.

President Joe Biden said on Tuesday he would ban imports of Russian oil. Forbes says Russia accounted for 7% of US gasoline imports at the end of 2021.

BP’s 2021 Statistical Review of World Energy said Russia in 2020 produced 10.1 million barrels per day of crude oil and natural gas condensate. The United States produced 11.3 million barrels per day, Saudi Arabia 9.3 million. These are the three main fuel-producing countries. The United States does not import natural gas from Russia.

Two gas stations in New Jersey are named after Lukoil, a Moscow-based oil company. The Newark City Council passed a resolution last week urging the city to suspend the licenses — because of their connection to Russia — for the two stations.

Other US imports from Russia include iron, steel, fertilizers, nuts, seafood, dairy products, snacks, precious stones and metals, computer software and video games. Russia was the 20th largest supplier of goods imported from the United States in 2019. That year, the United States imported $22.3 billion worth of Russian goods, according to the Office of the United States Trade Representative.

Wheat prices soared in the United States late last week on fears that Ukrainian production this summer may be down or non-existent. Russia and Ukraine together supply about a third of the world’s wheat production.

The www.russianfoodusa.com website says its most popular items sold in the United States include Birch Tar Soap, Cambrian Blue Clay, Chocolate Covered Marshmallows, and Baked Milk Cookies. It also sells chocolates, salami, nesting dolls, canned fish, buckthorn oil, pickle soup mix, and caviar.

It remains to be seen how sales of these various items in the United States are affected by Russia’s invasion of Ukraine.

Trade in the other direction, from the United States to Russia, will certainly decrease in the coming months.

Harley-Davidson announced last week that it has suspended bike shipments to Russia. Disney, Sony and Warner Brothers have each said they will halt film releases in Russia. Apple said it would stop selling at Apple Stores in Russia.

The European economy will probably be hit harder than ours. Europe is highly dependent on Russian natural gas and oil – 40% of its energy imports come from Russia. The European Union imports about 90% of its gas, about 97% of its oil. In contrast, the United States is not as dependent on energy outside our borders.

US gasoline imports from Russia are a relatively small slice of our energy pie, but the rest of the world gets a lot of gas from Russia.

This is why oil and gas prices are skyrocketing all over the world. That’s why Michigan gas pump prices surged last week.

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