17 March, 03:52

Western businesses would suffer the most if US imposes sanctions on Russia - economists

Western businesses would suffer the most if US imposes sanctions on Russia - economists

More and more experts are now saying that in the current standoff between Russia and the West, those applying sanctions might get hurt as much as those being sanctioned. Consumer spending is a very telling example of this. The Russian market is crucial for the bulk of Western European businesses. Russia is the EU’s largest trading partner.

In the US, it's the biggest foreign market for the soft drink giant Pepsi, generating around $5 billion in revenue annually, says the data provided by Deutsche Bank Securities. For the fast-food giant McDonald’s it’s a sizeable market that generates around 9 percent of the company's revenue a year.

According to a recent publication by the Wall Street Journal, some current and former American officials admit that broad economic sanctions against Russia could directly harm Western businesses.

"We in the business community do not want to be caught in the crossfire," said Myron Brilliant, executive vice president of the US Chamber of Commerce, when commenting the introduction of unilateral sanctions against Russia over political tensions in Crimea.

Russia's e-commerce is a special example, as it's one of the world's hottest markets now. Most global giants say it's a vital market for any successful company. Simple statistics: more than 30 million Russians shopped online in 2013, making e-commerce a $16 billion market. The sector is now growing by around 25 percent annually, with some retailers seeing sales double or even triple. Some sources, including East-West Digital News, claim Russia's e-commerce is set to break the $100 billion mark in the next decade. 

"We’ve been facing a very strong increase in e-commerce cross-border sales in Ebay and AliExpress selling for billions of dollars every year to Russian consumers, this is not very likely to be targeted, in my opinion," Adrien Henni, chief editor of EWDN, said. 

Some European Union leaders are quite reluctant to rush into sanctions, making it clear that their partnership with Russia is crucial for the welfare and economic growth on the European Continent.

Voice of Russia

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