Russia has imposed a 55.65% tariff on China-made furniture parts, a trade war salvo that has raised hard new questions about Moscow and Beijing’s “no limits” partnership with US President-elect Donald Trump’s inauguration on the horizon.
Since autumn 2024, the customs department of Russia’s eastern city of Vladivostok has re-categorized furniture sliding rail components as bearing types, resulting in a drastic increase in tariffs from zero to 55.65%. The city now handles 90% of China’s furniture parts imports into Russia.
Forbes first reported the protectionist move on November 26, and Russian media widely cited it on November 27. Sergey Zmievsky, president of Almaz, a Russian furniture company, told Forbes that sliding parts can account for 30% of the costs of making kitchen furniture.
The Association of Furniture and Woodworking Enterprises of Russia (AMDPR) said the new tariff would bankrupt Russian importers of furniture components and create an additional 15% cost for local furniture makers.
AMDPR president Alexander Shestakov said importing a finished piece of furniture, which is only subject to a 9-12% tariff, is now more profitable than producing it domestically. He said the targeted components are currently not produced in Russia, which imports about US$1.3 billion of these furniture parts annually, mainly from China.
He added that furniture parts importers now must pay up to 2 to 2.5 million rubles ($19,969 to $24,962) worth of tariffs for each container, causing many to send them back to China rather than take delivery.
Friendly tariffs
In mid-November, AMDPR sent a letter to Russia’s Ministry of Industry and Trade proposing imposing a 60% tariff on furniture imported from “unfriendly” countries and 10% on furniture from “friendly” countries. It said the average duty on Russian furniture exceeds 30% in Turkey and reaches 30-60% in Middle Eastern and North African countries.
Many Chinese commentators have said Vladivostok’s new tariff is unfair to Chinese suppliers, especially when Russia only charges a 10% tariff on similar goods imported from Europe. However, the Chinese Foreign Ministry and state media have not yet commented on the matter.
“I’m angry! Chinese media criticize Donald Trump for his potential tariffs against China on a daily basis but say nothing about Russian tariffs,” a Guangdong-based columnist using the pseudonym “Du Juan” said in an article.
“In this wave of unreasonable tariff hikes in Russia, Chinese furniture makers are facing rising challenges and market risks with a negative outlook,” she said.
A Tianjin-based writer named Bei Shuo said Russia’s tariff policy against China is more aggressive than Trump’s.
“After the Russian-Ukrainian war broke out, most European companies left Russia but Chinese suppliers quickly filled up the space to ensure a stable growth of Russia’s furniture sector,” he said. “But why does Russia now turn its back on us?”
He said the Russian government obviously wants to boost revenue to ease rising financial pressures caused by the ongoing Ukraine war.
“In the commercial world, there are no permanent friends, only permanent interests,” he said. “Russia wants to develop its manufacturing sector and knows that it can’t rely on China forever. It’s natural that Russia is leaning towards protectionism.”
He said Moscow should rethink whether it’s worth sacrificing its good trade relations with China for a small amount of tariff revenue.
In October, the Russian Ministry of Industry and Trade announced a plan to gradually increase its “recycling fee” for auto buyers by 70-85% from current levels by 2030. The fee, which is seen as another form of tariff targeting Chinese vehicles, will increase by 10-20% from the beginning of 2025.
Wang Wu, a Shanghai-based columnist, said China has become the top auto exporter to Russia in recent years. He said Moscow wants to use the recycling fee to force Chinese automakers to raise prices and build factories in Russia. He said this may work in the short run but will also fuel inflation.
“We should not expect that some so-called friendly countries will always respond with smiles,” he said. “We must always beware of their possible backstabbing.”
Robust trade
According to China Customs, Sino-Russia bilateral trade increased 26.3% year-on-year to US$240 billion in 2023.
China’s exports to Russia, including autos and manufacturing goods, rose 47% to $111 billion over the period. China’s imports from Russia, including oil, gas and metals, surged 12.7% to $129 billion. China‘s trade surplus with Russia amounted to $18 billion.
In the first ten months of this year, China exported $94 billion of goods to Russia, up 80% from the same period in 2021.
Considering China’s $367 billion trade surplus with the US in 2023, President-elect Donald Trump has vowed to impose tariffs to force China to buy more American goods.
“In the past few years, China and Russia seemed to have a perfect understanding of each other from energy cooperation to joint military exercises,” Zhou Yang, a Henan-based columnist, said in an article published on December 5. “But the recent tariff announcement has cast a shadow on this friendship.”
Zhou claimed Russia desperately needs China’s goods and investments but refuses to share economic benefits or military technologies with China.
He said Chinese people would not forget that the Russian Empire occupied 1.5 million square kilometers of China’s land in the 1900s and that the Soviet Union pushed the separation of Outer Mongolia, now called Mongolia, from China in 1911.
He said Russia and China can work together to defend themselves against the US but they can still compete with each other in the future.
One part that’s tariffed and this author claims trade war with China Russia. Vs Trump’s universal tariffs on everything. Is this a joke?
Russians have never been much good at making things, the average Mushik likes to get drunk, steal and then break stuff.
If Putin insists on making things in Russia it will mean more Chinese migration with all the problems that is bringing in Siberia
Nothing surprising as you allow a needle place to get in they will make sure a camel gets in.
Before you know it, the Russians will add waste baskets to the list.
Russia needs to make their own sliding rails for their entire furniture building ecosystem and beyond. Make the domestic producers pick up the tab for the enhanced technology to make the bearings and components, while leasing the tech to other fields for better tech saturation for the initial price tag. So pay the tariffs or invest in the tech to eliminate the tariffs altogether for lack of need.
20% VAT + 25% corporate tax + 25+% cost of capital + license fees + bribes to stay afloat and very low security of capital make any such long-term investments in Russia unreasonable.
Putin’s wants to avoid another trip to Peking. Last time he had to sit on a very soft cushion for the following week.
Luckily for him Xi (like most Chinese) is not very big in that department.
Speaking from experience, eh? Did your mom participate too? 😁
It’s the LBFMs who seem to like something ….. bigger !
Moat likely he will have a splitting image of Mao as Trudeau has with Castro.