U.S.-Russia Trade: Opportunities for U.S. Exporters: Get the Facts!
The Russian Market Holds Long-Term Opportunities for U.S. Exporters With Russia’s GDP and disposable income levels on the rise in recent years, bilateral trade between the U.S. and Russia has increased. Even as the global economic crisis affects both countries, Russia remains an important market for U.S. businesses.
U.S. goods exports to Russia totaled US$1.2 billion in Q1 2009. The U.S. exported US$9.3 billion in merchandise to Russia in 2008, a growth of 27% over the previous year. U.S. exports to Russia surged 56% to more than US$7.3 billion in 2007, following growth of 60% over 2004-2006.1
Russians’ real disposable incomes grew 2.7% in 20082 after rising 10% annually in 2006 and 2007.3 Although disposable income growth slowed in late 2008 and early 2009 amid the global economic crisis, recent years have seen Russian consumers purchasing imported retail goods and Russian firms investing in foreign-made equipment.
U.S. Exports to Russia Are Diverse, Ranging from Airplanes to Almonds and More As its economy continues to diversify, Russia imports a wide variety of goods.
U.S. aerospace firms exported more than US$481 million worth of aircraft to Russia in 2008. This followed exports of nearly US$719 million in 2007, an 87% increase over 2006 exports.4 Although growth in aircraft exports to Russia slowed amid the global economic crisis in late 2008 and early 2009, growth has been impressive in recent years, and future exports are likely to be driven by Russia’s need for 1,000 new airplanes over the next 20 years.5
Russia is an attractive market for U.S. nut growers. The U.S. exported more than 1,800 metric tons (US$7.2 million worth) of nuts to Russia in Q1 2009, following 2008 exports of 10,500 metric tons (US$49 million worth), representing annual growth of 25% by quantity and 13% by value.6 Almonds lead U.S. nut exports to Russia, standing at US$6.5 million in Q1 2009 after totaling nearly US$39 million in 2008.7
In Q1 2009, U.S. exports to Russia of make-up, skin-care and beauty preparations totaled US$12 million, following annual growth of 57% in 2008 to a total of US$87.5 million.8
Russia Is a Major Destination for U.S. Meat Exports In 2008, Russia was the largest export market for U.S. poultry9 and the 4th largest destination for U.S. pork and pork products.10 Russia has also recently reemerged as an important market for U.S. beef.
The U.S. exported nearly US$170 million (nearly 166,000 metric tons) of poultry to Russia in Q1 2009. In 2008, U.S. poultry exports to Russia totaled more than US$822 million (nearly 834,000 metric tons), a rise of 7% by value over the previous year.11
In Q1 2009, U.S. pork exports to Russia totaled nearly US$28 million (nearly 15,000 metric tons). Although this marked a year-on-year decrease amid the economic crisis, pork exports to Russia in 2008 saw annual growth of 94% by value and 70% by quantity to more than US$315 million (134,000 metric tons).12
U.S.-Russia WTO negotiations resulted in Russia reopening its market to U.S. beef, allowing beef exports to Russia to rise from only 3 metric tons in 2007 to nearly 15,500 metric tons (valued at more than US$54 million) in 2008. Year-on-year growth in quantity terms continued in Q1 2009.13
U.S. Cars Are Among the Most Popular Sold in Russia Russia is an important market for U.S. automotive companies. Ford Motor Company and General Motors Corporation own the best-selling foreign car brands and models in Russia.14
Although car sales in Russia slowed in the final months of 2008 and early 2009, U.S. motor vehicle exports to Russia totaled US$22 million in Q1 2009. Full-year 2008 exports saw annual growth of 42% by value to nearly US$1 billion and growth of 23% by quantity to 48,000 vehicles.15
In 2007, Russia imported more than US$700 million worth of U.S. motor vehicles, representing annual growth of 76% in value terms and nearly 50% in volume terms.16
U.S. exports to Russia of auto parts and accessories totaled US$4 million in Q1 2009 after growing 180% by value annually in 2008 to total US$151 million. This followed a rise of 129% by value over 2004-2007.17
Russia Relies on Foreign Machinery to Help Extract Its Abundant Resources Russian mining and harvesting firms utilize imported equipment to extract and gather oil, gas, minerals,food and timber and bring them to market.
The U.S. exported more than US$102 million worth of oil and gas field equipment and parts to Russia in Q1 2009. In 2008, these exports showed annual growth of 4% to total US$422 million, after growing 33% in 2007 and 50% over 2004-2006.18
U.S. exports to Russia of agricultural tractors totaled more than US$35 million in Q1 2009 after growing 70% annually in 2008 to US$350 million. This followed exports of US$206 million in 2007, which was a 181% increase over 2006 exports.19
40,000 U.S.-made chainsaws were exported to Russia in Q1 2009, following exports of 1.2 million chainsaws in 2008, representing annual growth of 31% by quantity. In 2007, chainsaw exports to Russia grew 40% over the previous year to a total of 942,000 units.20
1. ITC Dataweb, Total U.S. Exports to Russia, (All Export Categories) 2003-2008 and Q1 2009 YTD, by FAS Value.
2. “Russians' Real Disposable Incomes up 2.7% on Year in 2008,” Prime-Tass English-Language Business Newswire, January 27, 2009.
3. Keith Bush, “Russian Economic Survey, April 2009,” U.S.-Russia Business Council, https://www.usrbc.org/pics/File/EconSurvey/2009/SurveyApril2009.pdf (accessed July 8, 2009).
4. ITC Dataweb, Total U.S. Exports to Russia, (HTS-8802), 2003-2008 and Q1 2009 YTD, by FAS Value.
5. Philip Butterworth-Hayes, “Central, East Europe Lead Aviation Growth,” Aerospace America, October 2008.
6. ITC Dataweb, Total U.S. Exports to Russia, (HTS-0802) 2003-2008 and Q1 2009 YTD, by FAS Value.
7. ITC Dataweb, Total U.S. Exports to Russia, (HTS-080211+HTS-080212) 2003-2008 and Q1 2009 YTD, by FAS Value.
8. ITC Dataweb, Total U.S. Exports to Russia, (HTS-3304), 2005-2008 and Q1 2009 YTD, by FAS Value.
9. ITC Dataweb, Total U.S. Exports to All Countries, (HTS-0207) 2003-2008, by FAS Value.
10. ITC Dataweb, Total U.S. Exports to All Countries, (HTS-0203) 2003-2008, by FAS Value.
11. ITC Dataweb, Total U.S. Exports to Russia, (HTS-0207) 2003-2008 and Q1 2009 YTD, by FAS Value and by Quantity.
12. ITC Dataweb, Total U.S. Exports to Russia (HTS-0203) 2004-2008 and Q1 2009 YTD, by FAS Value.
13. ITC Dataweb, Total U.S. Exports to Russia, (HTS-0201+ HTS-0202) 2003-2008 and Q1 2009 YTD, by FAS Value and by Quantity.
14. Association of European Businesses in Russia Press Release, July 8, 2009.
15. ITC Dataweb, Total U.S. Exports to Russia, (HTS-8703) 2003-2008 and Q1 2009 YTD, by FAS Value and by Quantity.
16. ITC Dataweb, Total U.S. Exports to Russia, (HTS-8703) 2003-2008, by FAS Value and Quantity.
17. ITC Dataweb, Total U.S. Exports to Russia, (HTS-8708) 2002-2008 and Q1 2009 YTD, by FAS Value.
18. ITC Dataweb, Total U.S. Exports to Russia (HTS-8413500010, HTS-8413600050, HTS-8428900020, HTS-8428908020, HTS-8430494000, HTS-8430498010, HTS-8430498020, HTS-8431390050, HTS-8431398050, HTS-8431434000, HTS-8431438010, HTS-8479899550, HTS-8479899750, HTS-8479899850, HTS-8485900040, and HTS-8487900040), 2003-2008 and Q1 2009 YTD, by FAS Value.
19. ITC Dataweb, Total U.S. Exports to Russia, (HTS-8701901065, HTS-8701901070, HTS-8701901060, HTS-8701901055, HTS-8701901090, HTS-8701901035, HTS-8701901015, HTS-8701901010, HTS-8701901040, HTS-8701901030, and HTS-8701901005) 2003-2008 and Q1 2009 YTD, by FAS Value.
20. ITC Dataweb, Total U.S. Exports to Russia, (HTS- 8467810000) 2003-2008 and Q1 2009 YTD, by Quantity.
