Eurostat records EU trade surplus for fourth quarter in a row
The EU trade surplus in the second quarter of 2024 was €40.4 billion, according to Eurostat data. The surplus in European trade has been maintained for the fourth quarter in a row. In fact, this indicates that the shocks caused by the Russian military operation in Ukraine have been overcome: after the severance of trade relations with Russia, a deficit was recorded in European trade for more than a year. The “lost” Russian supplies are actively replaced by other trading partners, diversification has also affected European exports - products previously sent to the Russian Federation are now supplied to other countries. However, some goods still reach Russia - EU supplies to countries that European authorities consider intermediaries in trade with the Russian Federation, despite the risks of secondary sanctions since the beginning of the military operation, are also growing.
The EU trade balance in the second quarter of 2024 was a surplus of €40.4 billion, according to Eurostat data. EU exports in April-June amounted to €650.7 billion, imports - €610.3 billion. The surplus in European trade has been recorded for the fourth quarter in a row (see chart) after a long period of deficit (since the fourth quarter of 2021). After the start of the Russian military operation in Ukraine, it grew more and more noticeably and reached a maximum of €155 billion in the third quarter of 2022 - due to a surge in energy prices and sanctions imposed on Russia. The trade deficit in the energy sector was then estimated at a record €193.8 billion.
The reversal of the dynamics occurred in the third quarter of 2023, when the EU trade balance was surplus by €18 billion. Comments from Eurostat and statements by European politicians were cautious: the statistics were then explained, among other things, by external circumstances (mainly the decline in energy prices), while the impact of the growing diversification of supplies was assessed as “restrained” and “concomitant”. A year later, we can say that the trend remains stable - in fact, this means that the consequences of the multiple reduction in trade with Russia by Europe have been overcome.
Import statistics show that the “lost” supplies from the Russian Federation are being actively replaced by other trading partners of the European Union.
Let us recall that, according to the Federal Customs Service, in the first half of 2024, Russian exports to Europe decreased by 33.8% year-on-year, to $31.7 billion (see “Ъ” of August 12). About two-thirds of the remaining supplies after a noticeable contraction are purchases of natural gas, oil products, nickel, fertilizers, iron and steel. According to Eurostat estimates, Russia's share in imports of all these goods continues to decline (updated statistics on bilateral trade will be published in the middle of the week). At the same time, the US (gas, nickel and oil products), Norway (gas and oil products), Algeria (gas), Saudi Arabia (oil products) and China (iron and steel) are increasing their shares in such supplies.
Diversification is also noticeable in European exports: since the beginning of the year, they have been growing, including to the USA, Japan, South Korea, India and Brazil. Some countries that have increased trade with the EU over the past two years are receiving goods that were previously exported to the Russian Federation: for example, we are talking about the supply of machinery and equipment, as well as chemical products. It should be noted that the growth of exports in these categories is also due to Turkey, China, Kazakhstan and Armenia - these are countries that the EU authorities consider intermediaries in the trade of European products with the Russian Federation.
The EU authorities continue to fight this - it is difficult to assess the success of this fight, since its results differ from country to country. For example, imports of Turkish goods to the Russian Federation in January-June 2024 decreased year-on-year by 28.3%, to $4.2 billion, which is largely explained by the contraction of re-exports due to fears of secondary sanctions. Imports from China over the same period decreased by 0.8% - to $51.7 billion. Moreover, some reduction in imports of goods in the first half of the year is explained not so much by China's fears due to EU threats, but by problems with payments. This is indicated, among other things, by the fact that in the last months of the half-year, after some of the problems were removed, deliveries returned to growth.
