Economic sanctions strategy

Was it the West’s intention to isolate Russia economically? It did not succeed.

A new Prognos analysis shows: Trade between the G7 countries and Russia was in no way interrupted during the first twelve months following the outbreak of war, but rather fell by a good half.

Following the invasion of Ukraine by Russian troops on February 24, 2022, the West has sought to weaken Russia economically by imposing sanctions. Overall, however, this has in no way brought Russia's business to a halt. A brief analysis of the foreign trade data reveals differences in the trade of individual countries with Russia and between different product groups.

To the brief analysis (PDF)

„Only the US, Canada, and the United Kingdom have consistently ceased their exports. Germany is not among the leaders.“
Dr Michael Böhmer
Michael Böhmer
Prognos AG/FOTOS Koroll

From -92 to -39 percent: Different developments in Russian business

The G7 countries’ trade data was analysed for March 2022 and February 2023, with the exception of raw materials such as oil and gas.

  • Many companies in the G7 countries continue to rely on goods from Russia. The import volume (total) of 26 billion US dollars is still considerable.
  • Canada (-92 percent) and the US (-85 percent) have slowed down exports to Russia most consistently.
  • Germany does not play a leading role, but sits in the mid field of the G7 countries with a 61 percent decline in exports.
  • Italy reduced its exports the least, at 39 percent.
  • While G7 exports to Russia have been reduced by 61 percent, imports from Russia have fallen by 54 percent.

From -89 to +5 percent: German exports by product group

While some industries in Germany are experiencing massive export slumps, some product groups are even seeing export increases.

Machinery, motor vehicles, and electrical parts, which accounted for 45 percent of German exports to Russia before the war, have recorded massive export slumps of between -69 per-cent (machinery) and -89 percent (motor vehicles).

Exports of pharmaceutical products increased by 5 percent and many agricultural products and food products have been exported to Russia to a greater extent than before the war. This pic-ture is quite consistent with the logic of the sanctions policy, which is not intended to target the broad population of Russia.

To Russia through Kazakhstan – the role of third countries

The fact that Germany has reduced its direct exports to Russia does not necessarily mean that less goods end up there: There are signs that there is a detour taking place through Russia-friendly third countries. This concerns the automotive industry in particular. Exports to these countries have increased to some extent, Kazakhstan leads with +470 percent, which is difficult to explain based on increased demand in third countries alone. In the machinery sector, exports from Germany to such countries have also increased.

Links & downloads

Brief analysis of G7 trade with Russia (PDF)

Project team: Dr Michael Böhmer, Johann Weiss

Last update: 17.5.2023

Feel free to contact us.

Dr Michael Böhmer

Chief Economist, Head of Corporate Services

+49 89 9541 586 701

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