Vladimir Putin must learn from Donald Trump and ramp up duties on more than the US $430 million worth of European furniture expected to flood Russia this year. That is according to the Furniture Association of Russia (FER), which warned that a strengthening ruble, Europe’s desperation to find new markets and a mere 9-12% tariff on imports (despite Europe hitting Russia with 30-60% sanctions) had seen trade mushroom over the past 3 years.
“If the US can prioritise domestic production regardless of trade agreements, Russia should adopt a similar stance to safeguard its industry.”
As it stands, Italy and Germany are the leading contributors to the surge entering Russian ports, with export volumes from both countries nearing pre-COVID (and Ukraine war) levels: “In the first quarter of 2025, the ruble appreciated 15% against the euro, from 105.09 to 89.65, reducing the cost of European furniture for Russian buyers. At the same time, local producers are dealing with higher costs for materials and components.”
According to the FER, the problem stems from European manufacturers being propped up by subsidies and tax incentives. These incentives allow them to cut prices and expand into new recovering markets like Russia to compensate for a shortfall in European demand, which dropped from Euro 48.5 billion in 2021 to just Euro 38 billion last year.
At the same time, Russian domestic production has dropped by 2%, with the cost of materials and other components—including plywood, MDF, and particleboard—expected to rise by more than 15%. For the first time in several years, this will outpace inflation: “Companies are trying to contain the growth in prices, but with increased supplier costs and intensified European competition, the pressure is growing.”
- To learn more about Trump’s plans to ramp up domestic production of timber and timber-based products, click here for Wood Central’s article on Section 232 of the Trade Expansion Act of 1962, which is due for release in the coming weeks.
