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2.0 Politics
2.1 Despite Biden’s victory Russo-USA relations will not
improve
Economic relations between Russia and the United States have long been sluggish and have been overshadowed in recent years by political tensions, economic sanctions and intensified competition in international energy markets. The United States is clearly a more important economic partner for Russia than Russia is for the United States. Russia has sought to reduce the importance of the dollar to its economy in recent years, but it is still large.
Last year, the value of trade in goods between Russia and the United States was about $30bn. In recent years, the United States has accounted for about 4% of Russia's trade in goods and Russia for 0.7% of the United States' trade. Russia mainly exports crude oil and petroleum products, metals and fertilizers to the United States. Russia mainly imports machinery and equipment and medicines from the United States. This year, the value of trade between the countries has shrunk by about 10%. UNCTAD estimates that the United States is the largest source of foreign direct investment in Russia, while the so-called the effect of transit countries has been removed.
In recent years, the United States has imposed several economic sanctions on Russia, e.g. Due to the conquest of the Crimean peninsula as well as interference in the elections and the threat of new sanctions, the economic relations between the countries have been overshadowed. Sanctions e.g. prohibit the arms trade and restrict the export of oil-related technology to Russia, as well as restrict access to finance for certain Russian companies and the Russian state. In addition, financial sanctions have been imposed on a number of individuals and companies. Russia, on the other hand, has banned the import of several foods from the United States as part of the so-called counter-sanctions.
In the international energy market, competition between Russia and the United States has intensified in recent years as US production of shale oil and liquefied natural gas (LNG) has gained momentum. The US share of global crude oil and LNG exports has multiplied to around 10% in recent years. Increased US supply has pushed the world market price of oil and pushed Russia into production restriction agreements with OPEC countries. In the gas market, American LNG is also a potential competitor for Russian pipeline gas in Europe.
In recent years, Russia has sought to reduce its dependence on the dollar. The dollar’s share of Russia’s debt, assets and trade has shrunk, but remains high. In Russia's foreign trade and foreign debt, the share of the dollar has shrunk from more than 60% in recent years to about half. In Russia's foreign exchange reserves, the share of dollar-denominated assets has shrunk from 45% to about 30%. Back in 2017, Russia was the country with the highest
8 RUSSIA Country Report December 2020 www.intellinews.com
