01
High tariffs are still coming, not from the United States, but from Russia.
Recently, Russian customs have decided to significantly increase tariffs on imported furniture accessories from China, from 0% to 55.65%. Isn’t this beyond the imagination of many Russian fans?
Everyone knows that we export a lot of furniture, and now about 90% of furniture accessories exported to Russia have to go through Vladivostok Customs. Recently, this customs has started to adopt a new classification method for goods, which classifies furniture accessories with circular or rotating components as bearings. Previously, this type of product had no tariffs, but now the tariffs have increased to 55.65%.
The furniture accessories imported by Russia mainly come from China, with an annual import value of up to 1.3 billion US dollars.
Many people may find it strange that we are very important to Russia now, how can they increase tariffs?
Actually, this is not surprising at all.
Not only regarding furniture, many Russians have been arguing recently, demanding tariffs on cars from China. The main push for this issue is from Volga Motors, Russia’s largest automaker, who believes that Chinese car imports are harming Russia’s interests.
What’s going on here?
02
After the war between Russia and Ukraine, European and American car manufacturers all withdrew from Russia, resulting in a shortage of car supply in Russia. As a result, Chinese cars saw an opportunity.
China’s automobile industry is booming, and it is highly sought after to go global. Therefore, in one or two years, Russia’s automobile sales pattern will undergo a major change. At the end of 2023, Russia will calculate its market share at that time:
Volga Automobile sold 350000 units, accounting for 38%, ranking first in market share; The rest are mostly Chinese brands, with Chery 206000 vehicles, Great Wall 140000 vehicles, and Geely 84000 vehicles, accounting for a total of 46%.
This data is already quite impressive. As a result, the export of Chinese cars to Russia has continued to rise this year, with a year-on-year increase of 28.3%. Russia has become the most important exporter of Chinese cars.
So people in the Russian automotive industry are talking about adopting tough protectionist policies against Chinese cars.
Some measures have been implemented. Starting from October 1st, Russia will increase the scrap tax on non domestically produced cars by 70% to 85% according to different vehicle models. This scrap tax is a tax on the scrap process of cars and is a one-time mandatory payment. It will significantly increase the price of cars, such as cars with displacement below 2.0. The previous scrap tax was 22000 yuan, but now it has risen directly to 42000 yuan. In order to make profits from the past, the selling price must increase by at least 20000 yuan, which is very unfavorable for imported cars. In fact, it is aimed at Chinese cars.
Many people in the Russian automotive industry also demand that Chinese car companies set up factories in Russia, and even propose to charge high tariffs, all in order to avoid the impact of Chinese cars on the Russian automotive industry.
03
Many Russian fans have a diode mentality, thinking that how can Russia currently set up these obstacles for China’s imports? In fact, great power games and trade frictions are normal, and we are the same with Russia.
Starting from December 1st, our export control list for Russia has also been expanded, including servers, components, and even welding argon gas. It will be difficult to export to Russia in the future, and Chinese companies exporting dual-use products to Russia will face a 25% tariff.
All these settings are for the benefit of their own country. Many people see the relationship between countries as a kind of “brotherly” relationship between people. In fact, even good brothers have various calculations and constraints on each other.
Chinese car manufacturers have made a lot of money in Russia in the past two years, and Russia has also contributed to the continuously increasing sales. Therefore, many people are cheering, ‘Without the Western market, we have the Russian market.’ But Russia also needs to consider its own interests and give up the very important automotive industry. How can it be willing?
04
For example, after the Russia Ukraine war, 23 Chinese planes were detained for more than 800 days, but these planes belonged to domestic aircraft leasing companies. The business model of these leasing companies is to buy planes themselves and rent them out to airlines, similar to buying houses and renting them out to earn rent.
After the war began, Europe, America, and Russia seized each other’s property. Europe and America seized all of Russia’s planes in their possession, totaling over 80, while Russia also seized over 400 European and American planes in Russia.
Among them, 23 planes were Chinese, and one CMB plane was leased to Aeroflot but was detained at Munich Airport. After more than 800 days of negotiations, the plane finally returned.
However, 22 aircraft from companies such as Bank of China Leasing and Zhejiang Rifa Precision were seized by Russia because they were leased to European and American airlines. These two companies have also put in a lot of effort, but there hasn’t been much progress because Russia is currently banned from selling new planes and parts, and maintenance is a problem. It’s possible that some planes have already been dismantled and used as parts.
This has also led to heavy losses for these aircraft lessors. Their financial statements have been significantly impaired. If you have a good relationship, you will have no choice but to give it to you. The common people’s brotherhood and sisters relationship, which is heart to heart, is really not suitable for big country relations. More likely, it is the people who love you who hurt you more. So don’t always worry about your competitors and don’t always rely on friends. The most important thing is to see whether you are tough or not.
