Russia economy meltdown as trade with major ally plummets 9.1%

Trade between Russia and China fell in the first six months of the year in a further sign of weakening in the Russian economy. Figures issued on Monday (July 14) show trade totalled £79.3billion (US$106.48bn), a drop of 9.1% year on year.

Exports from China to Russia fell 8.4% over the first two quarters of 2025 while imports into China from Russia reduced by 9.6%. Russia still maintained a trade surplus with China but this reduced 10.2% compared wit the same period in 2024.

Moscow has become increasingly reliant on China to prop up the Russian economy, which has been subject to western sanctions since Vladimir Putin launched his country's full-scale invasion of Ukraine.

Russia supplies China with oil, gas, coal, copper, copper ore, timber, fuel and seafood while China exports goods, including cars, computers and smartphones.

Despite the recent falls, China-Russia trade volumes set a record last year, reaching a total of £182.22bn (US$244.81bn). This is up from £178.74bn (US$240.11bn) in 2023.

The latest trade figures between the two allies also show overall growth slowing to 1.9% in 2024, compared with a surge of 26% the year before, according to the data reported by The Moscow Times and sourced from China's General Administration of Customs.

Putin faced more bad news on Monday when US President Donald Trump threatened to slap steep secondary tariffs on Russia if Moscow didn't reach a deal with Kyiv within 50 days.

Mr Trump promised "biting" trade levies if the war doesn't end, describing them as secondary tariffs, meaning they would target Russia's trading partners. If implemented, it would signal an attempt to isolate Moscow in the global economy.

He said during a meeting with NATO's secretary general Mark Rutte: "We're going to be doing very severe tariffs if we don't have a deal in 50 days."

The president suggested such levies could feature 100% tariffs, but didn't make it immediately clear what products could be targeted.

Russians are already grappling with interest rates of 20% and high inflation. In June, Russia's economy minister warned the country was on the verge of a recession.

Oil and gas revenues have dropped in the wake of sanctions and falling prices, leaving Russia with a budget shortfall, putting a squeeze on public services.

However, Russian figures suggest the country's economy grew 4.3% in 2024, more than the US (2.8%) and the UK (1.1%).