In their first talks, Russia’s President Vladimir Putin and the US President Donald Trump noted the importance of restoring full-scale economic partnership, with due account of the fact that in 2016 Russian-American projects started and continued virtually across the entire economy. Mutual trade in early 2017 also demonstrated some positive dynamics.
A sudden warming in the Russia-US relations is unlikely. Rapprochement is only possible in consecutive, constructive steps, with joint business projects creating the required economic base. The disposition for such collaboration has been expressed in a number of statements of government and business officials on both sides since late 2016.
The US is one of Russia’s most important trade partners today. In 2016, the turnover between the two countries accounted for USD 20.3 billion.
In terms of the trade turnover, the US is the fifth among Russia’s partners (ninth in Russia’s exports and third in its imports).
Russia plays a key role in exporting certain products and services to the US (titanium, non-ferrous and precious metals, iron and steel products, petrochemicals, software, large-size air freight operations, and space technology).
Russia’s major exports to the US are petrochemicals and mineral commodities (50%), metals and articles made from them (21%), and chemicals (13.5%).
Once the sanctions were launched, the turnover between the two countries went down, but the first quarter of 2017 shows some positive trends: the Federal Customs Service reports that its rate rose 25% year-on-year.
Exports from Russia to the US rose 32.9% to USD 2.4 billion.
Imports from the US rose 18.2% to USD 2.5 billion.
The new US government’s initiatives to protect national industries, including the use of steel in infrastructure projects, can deter the turnover growth.
The prospects of diversification of Russia’s exports to the US are in innovative biotechnology products, advanced telecommunication devices and network technology, space industry and cost-effective use of resources.
Despite some political disagreements, the bilateral business interest in investment remains high.
The Bank of Russia reports that the inflow of direct US investments to Russia in the first three quarters of 2016 made up USD 278 million, while the inflow of direct Russian investments to the US accounted for USD 916.3 million.
These numbers include the US investments in Russian export-oriented and import-substituting industries. A number of such projects began in 2016 alone, with 3М Joint Company and Veropharm Public Joint-Stock Company producing medications for oncology patients, a new line of pet foods by Mars Inc., Pfizer’s pharmaceutical factory and Novamedica Company in the Kaluga Region among them.
Mutual collaboration in portfolio investments is gaining momentum as well.
While the first (since 2013) Russian issue of sovereign Eurobonds for USD 1.75 billion in May 2016 saw mostly UK investors, 53% of the additional issue of USD 1.25 billion in September 2016 was purchased by investors from the US, in a deal more than six times oversubscribed.
In March 2017, the Russian Government invested USD 13.5 billion in the US Treasury securities, bringing the volume of its portfolio to USD 99.8 billion. Russia is 15th in the list of top holders of the US debt.