Russia Bans Food Imports from US, EU, and other Countries.

JohnChisum

The tit for tat continues. The countries and regions on the list are US, EU, Australia, Canada and Norway. As far as the beef ban is concerned, this should affect McDonalds, Burger King and Yum Brands among others.

The bigger worry on the horizon is the possibility of Russia banning overflights of foreign airlines. That will add to fuel costs and time to a number of routes particularly Europe-Asia.

More tension for the markets.

rjb112

Putin Acting Badly Again

"Medvedev said Russia is also considering banning Western carriers from flying over Russia on flights to and from Asia — a move that would significantly swell costs and increase flight time. He said a decision on that hasn’t been made yet."

"Russian Prime Minister Dmitry Medvedev says the ban covers meat, fish, milk and milk products and fruit and vegetables........"

JohnChisum

I changed the headline to better reflect what is banned.

If I recall correctly, Russia claims a large chunk of the Artic or all of it as theirs. I wonder if this will apply to the overflight ban if that does come about?

scott

So if Russia is banning imports of various food products, can local suppliers and other countries make up the difference?

I'm kinda surprised he didn't kick foreign energy companies out of the country as the first move.

JohnChisum

<<i><"So if Russia is banning imports of various food products, can local suppliers and other countries make up the difference? "
/i/i>

I'm not sure if this. Watching Bloomberg on this story, they spoke of Nestle which included formulas for babies. There are some specialty foods that might not be made in Russia. I suppose if this is true then babies would be fed the old Russian standby which is watered down vodka. (Joke)

As this story develops we should know more on specifics.

LLJB

He's going to cause food shortages and inflation and he also recently approved an increased sales tax that takes effect at the end of the year, further hurting an economy that's already struggling (although it may help in the immediate future as people spend more to buy things before the tax). Of these few options, restricting airspace seems to have the biggest impact on those he's irritated with while minimizing the impact on his own people. Somehow his choices seem illogical but he undoubtedly has his strategy. If history provides any example, this could go on for a long time.

JohnChisum

One of the news articles on this subject gave an opinion that Putin won't touch the airspace as Russia is already charging a premium for airlines to use those routes. One option would be that the affected countries would increase the landing fees on Russian airlines to compensate.

Gary

I knew it was a bad idea for us to get in bed with them on the space program.

Only a matter of time till this is shut down!!

scott

LLJB said:

He's going to cause food shortages and inflation

That was my first thought, as well.

scott

http://www.zerohedge.com/news/2014-08-07/first-brics-bank-now-brics-food-bank

"...Russian importers starting cancelling orders – first as a precaution and subsequently as it was confirmed that trucks would be turned away at the border,” Afrucat said in a statement."

Sven

That only hurt the Russian citizens since they import 60-70 % of their food. Can't image this persist till winter.

TSP_Transfer

Sven,
http://news.bbcimg.co.uk/media/images/76779000/jpg/_76779499_tadfhrsq.jpg
Caption for image. More of this on the menu in Moscow?
Make some kraut or having a good root cellar might get you to April .
From
http://www.bbc.com/news/world-europe-28680656

LLJB

Interesting, apparently the Russians have said they will import more from South America and New Zealand to offset the reduction of imports from the US, Europe and others. To the extent they just trade on supplier for another, the overall impact will be to boost transportation costs for both themselves and others as a rotation happens in who buys from who. That doesn't have the impact sanctions are usually intended to have, unless the US and EU will find it difficult to sell their fruits, meat and vegetables to others, which doesn't really seem likely.

mrdarcey

I was curious on the legality of cancelling overflights, since much of aviation law is set by multi-lateral treaty and so much international traffic has to go over Russian airspace. Turns out Russia isn't a part of the overflight treaty, so they could do it, I gather. Don't know why they would, as that would just be petulant and cost them money.

If anyone is interested, there is a decent write-up on wikipedia under "freedoms of the air"