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15 July 2019

Serious Concern

Source: UJBL

Ukraine’s trade policy is among the most sensitive areas of international cooperation due to its vivid geopolitical flavor. These past years became truly turbulent for business and no less for those who shape policy. Ukraine might feel the consequences of ongoing tensions between global leaders, and also maintains its own trade war front with its northern neighbor, Russia. The state has, of course, been diversifying trade marketing efforts in favor of the EU and other markets around the globe.

UJBL: With rising tensions and trade wars between the United States, EU and China, how can this affect Ukraine’s trade policy? Do you see any threats for our country?

Anzhela Makhinova: It goes without saying that the “trade war” begun in March 2018 by the US via adoption of import tariffs on steel (25%) and aluminum (10%) had a negative impact on the entire international trade environment as it caused a wave of various protectionist measures around the world. Specifically, the EU, Canada, Turkey, and the Eurasian Economic Union have all initiated safeguard and anti-dumping investigations against steel products that have already resulted in application of provisional and/or definitive measures.

As a world-leading steel supplier, Ukraine has inevitably been heavily hit by additional quotas and duties applied in major export markets. This is not the only negative consequence. There is another side of the coin. When acceding to the WTO, Ukraine considerably decreased import duties applied to different industrial products. Steel products were no exception, with 0% import duties applied to most of them. This situation is very dangerous for Ukrainian steel producers because the Ukrainian market could be flooded with exports of steel products from third-party closed export markets. Hence, Ukrainian steel producers will protect their internal market as soon as possible.

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