Russia Bans Array of U.S., EU Foods in Retaliation Move.

http://www.bloomberg.com/news/2014-08-07/russia-bans-array-of-u-s-eu-food-in-retaliation-move.html

Russia slapped import bans on an array of food goods from the U.S. and Europe, striking back at sanctions over the conflict inUkraine, where at least 10 people were killed overnight as separatist fighting rages on.

The restrictions include all cheese, fish, beef, pork, fruit, vegetables and dairy products, Prime MinisterDmitry Medvedev said today at a cabinet meeting in Moscow. The curbs target nations that have imposed or supported sanctions against Russia and also include Canada, Australia and Norway.

“The decision on retaliation wasn’t easy for us,” said Medvedev, who also announced a ban on Ukrainian planes flying over Russia and a review of the use of Siberian air space for other carriers. “But I’m sure that even under such conditions we will be able to turn the situation to our own benefit.”

Russia is embroiled in the worst standoff with the U.S. and its allies since the Cold War over Ukraine, where government troops are cracking down on pro-Russian insurgent strongholds in the east and Russia’s military is massing thousands of troops across the nearby border. The U.S. and the European Union have targeted Russia’s economy, expanding penalties last week, joined by Canada,Japan and Switzerland, after the downing of a Malaysian Airline System Bhd. (MAS) jet in a rebel-controlled area.

Russia imported $43.1 billion of food and raw agricultural materials last year. Of that, $36.9 billion came from countries outside of the former Soviet republics in theCommonwealth of Independent States, according to Federal Customs Service data. Even before the decree, Russia’s public health regulators banned some imports from EU countries, the U.S. and Ukraine.

While the food ban will harm countries supplying food to Russia, “it will likely only amplify the effects of financial and sectoral sanctions imposed on Russia,” Dmitry Polevoy, an economist at ING Groep NV in Moscow, said in an e-mailed note. “This will likely add to overall sanction costs via higher food inflation and so will have a widespread effect on households.”

Workers arrange boxes of freshly picked tomatoes inside a greenhouse at a wholesale vegetable production plant in Siechnice, Poland.