Only with China does Russia trade more. Current tensions and a tightening of mutual sanctions harbor the risk of further damaging mutual trade relations. That would hit the Russian economy, but Germany is also vulnerable due to its dependence on Russian gas.
Escalation of conflict threatens trade
Since the annexation of Crimea and the conflict in eastern Ukraine in 2014, relations between Russia and the European Union (EU) have been strained. The introduction of mutual sanctions puts a strain on trade relations. The current tense situation on the Russian-Ukrainian border could put the economic relationship to an even harder test. The West fears that there could be a Russian invasion of Ukraine, although Russia has denied such plans. In the event of an attack, the West is threatening massive trade sanctions against Russia. This scenario would have further negative consequences for the already shaken trade relationship.
Sanctions and Corona Crisis
After the introduction of mutual sanctions in 2014, there was a collapse in trade in goods between Russia and Germany. The volume of Russian trade in goods (exports and imports) with Germany fell from around USD 75 billion in 2013 to around USD 42 billion in 2020. Russia’s trade in goods with Germany accounted for 7.4 percent of Russia’s total trade in goods . Russian trade with the EU shows a similar trend. In 2013, the total trade in goods between the EU and Russia was around 393 billion US dollars. In 2020, it was just $192.3 billion. However, with a share of around 34 percent of Russia's total trade volume, the EU remains by far Russia's largest trading partner.
In addition to the sanctions, falling oil prices have also contributed to Russia's falling export values in recent years. The Corona crisis also affected Russian exports to Germany and the EU in 2020. These were USD 9.2 (61.6) billion lower than in 2019. The shares of Germany and the EU in total trade in goods In the pre-Corona year 2019, Russia was slightly higher at 7.9 and 39.2 percent, which still corresponds to a significant reduction compared to 2013. The recovery of the Russian economy after the Corona slump and the sharp rise in energy prices in the last twelve months will help Russian export values to be slightly higher again.