Russia Hits China with Tariffs
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Russia has imposed a new tariff on a category of imports from China, an ally that has been a crucial savior for Moscow since President Vladimir Putin's 2022 invasion of Ukraine.
Customs officials in Vladivostok recently reclassified sliding rail parts used in Chinese furniture, placing them alongside furniture bearing parts, meaning they are now subject to a 55.65% customs duty, the Association of Furniture and Carpentry Companies of Russia said in a Nov. 28 press release.
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The association warned of "serious consequences," saying that "such a sharp increase in tariffs could lead to the bankruptcy of many importers of furniture components and an inevitable increase in the price of domestic furniture by at least 15%," its website said.
The Far Eastern port city handles about 90% of shipments of Chinese furniture hardware to Russia. Industry insiders are wondering why China, Russia's "hostage-free" partner, is imposing tougher tariffs than European suppliers. Russian train near Manzhouli, China
A file photo of a Russian train loaded with oil, timber and other goods entering China near Manzhouli. Players in the Russian furniture industry are angered by a reclassification of Chinese furniture fittings that has made them... More Getty Images
"The annual import volume of furniture fittings is estimated at $1.3 billion, and it is quite normal that currently, customs duties on imported fittings are only 0 percent - this provides significant support to the industry," Alexander Shestakov, who is the association's president, told Forbes.
Shestakov stressed that similar fittings imported from Europe are subject to customs duties of no more than 10 percent. He then emphasized how dependent Russia is on Chinese imports and said that these parts are not produced domestically. According to Vadim Vildanov, CEO of Boyard, a Russian furniture manufacturer, the move puts pressure on Chinese suppliers and hurts Russian manufacturers. "This goes against the interests of domestic furniture production, because it is Chinese hardware stores that now cover the needs of the Russian market," he told the news agency.
The move has sparked a sense of betrayal among some Chinese commentators. "If such actions had been taken by the United States, positive energy experts would have long condemned it as hegemonic behavior doomed to failure. However, in the face of Russia's ruthless measures, they remain silent, spineless like a jellyfish," wrote a columnist under the pseudonym Du Juan for the Chinese website NetEase News. Trade between Russia and China has surged since the invasion of Ukraine in February 2022, helping to prop up Russia's war-torn economy under Western sanctions.
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Bilateral trade hit a record $240 billion in 2023, boosted by Russian oil exports and Chinese sales of electronics, vehicles and machinery, a $50 billion increase from the previous record set in 2022.
This year, trade flows have faced more headwinds amid increased US secondary sanctions on goods seen as supporting Russia's military operations. Chinese exports to Russia fell in March for the first time since March 2022. However, according to customs data, Chinese exports to its neighbor increased in October by almost 27% compared to a year earlier.
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