EU Plans New Tariffs on Agricultural Products and Fertilizers from Russia and Belarus

Brussels, January 28, 2025 – The European Commission has proposed a new regulation introducing additional tariffs on agricultural products and nitrogen-based fertilizers from Russia and Belarus. The goal is to reduce the EU’s import dependency and exert economic pressure on these countries. If enacted, the regulation is expected to significantly increase import costs for numerous raw materials, leading to higher consumer prices within the EU.

However, it is important to note that this proposal has not yet been approved and must go through further discussions and approval processes within the EU institutions before taking effect.

Approval Process: What Steps Remain?

Before the proposed tariffs can be implemented, the regulation must go through several stages of approval:

1. European Commission Proposal: The European Commission has put forward a proposal, outlining the scope, rationale, and expected impact of the new tariffs.
2. European Parliament and Council Review: The proposal will be reviewed by the European Parliament and the Council of the European Union. Both institutions may suggest amendments, negotiate the final terms, and ultimately approve the regulation.
3. Consultations and Expert Assessments: Various committees, including agricultural and trade experts, will assess the impact of the proposed measures and provide recommendations.
4. Voting Process: The European Parliament and the Council must each vote on the final version of the regulation. Approval requires a majority in both institutions.
5. Final Adoption and Implementation: If approved, the regulation will be published in the Official Journal of the European Union and enter into force on a specified date. Member states will then be required to enforce the new tariffs.

Which Products Are Affected?

The regulation covers a wide range of agricultural raw materials and food products, including:

• Live animals and meat products
• Dairy products, eggs, and honey
• Sugar and cocoa
• Coffee, tea, and spices
• Fruits and vegetables, including certain roots and tubers
• Edible oils, including olive oil, palm oil, and castor oil
• Grains such as oats, rice, and triticale
• Milling products such as wheat bran, cornmeal, and rice flour
• Animal feed and its components
• Nitrogen-based fertilizers and certain compound fertilizers

These products play a crucial role in European food production and agriculture. Higher import costs could lead to increased expenses throughout the entire supply chain.

Import Volume: What Is the Economic Impact?

The affected countries export significant amounts of these goods to the EU. In 2023, import volumes were:

• Russia: Approximately €1.4 billion in agricultural products
• Belarus: Another €1.4 billion, primarily in agricultural raw materials and fertilizers

Thus, the proposed tariffs would impact imports worth around €2.8 billion. The fertilizer market, in particular, is expected to face significant pressure, as Russia and Belarus are among the world’s leading exporters of nitrogen and potash fertilizers.

Expected Price Increases in the EU

If the new tariffs are implemented, experts anticipate noticeable price effects in the EU market.

1. Fertilizers:
   • Russia and Belarus are major suppliers of nitrogen-based fertilizers. Tariffs could increase costs for European farmers by up to 20-30%.
   • Higher fertilizer costs will drive up the prices of grains, fruits, and vegetables.
2. Basic Foodstuffs:
   • Price increases of 10-15% are expected for flour, bread, dairy products, and meat due to rising production costs for farmers and processors.
   • Sugar and cocoa-based products may see significant price hikes, as some raw materials are imported from Russia.
3. Animal Feed:
   • Rising feed prices will increase costs for livestock farmers, impacting milk, eggs, and meat prices.
4. Edible Oils:
   • Palm oil, castor oil, and olive oil could see 5-10% price increases, as alternative suppliers also have high prices.

Conclusion: Consequences for Trade and Consumers

The proposed tariffs could have far-reaching effects on European agriculture and food production. While the EU aims to reduce its reliance on Russian and Belarusian imports, this move will likely lead to short-term price increases for agricultural goods. Farmers who depend on fertilizers from these countries will bear the brunt of higher costs.

Experts advise businesses in the agricultural and food industries to explore alternative supply sources and factor in cost increases early in their planning. If the regulation is approved, implementation is expected by the end of 2025.