EU-Russia Trade Could Generate €11–16 Billion Annually for Ukraine, Study Suggests

Four years after Russia’s invasion of Ukraine, EU-Russia trade worth €57.2 billion in 2025 could be leveraged to fund Kyiv’s war effort through a targeted “Ukraine Support Tariff,” according to a Kiel Institute analysis. The proposal aims to generate €11–16 billion annually for Ukraine while intensifying economic pressure on Moscow.

How Much Trade Remains Between the EU and Russia?

Despite 20 EU sanctions packages since 2022, bilateral trade reached €57.2 billion in 2025, including €27.2 billion in EU imports from Russia and €30.0 billion in EU exports to Russia, according to the Kiel Policy Brief. While this reflects a sharp decline from pre-invasion levels, the remaining trade still provides economic benefits to Russia.

“As long as trade with Russia continues, Europe should use it to support Ukraine,” said Julian Hinz, head of the Trade Policy Research Group at the Kiel Institute. The study proposes a combined import tariff on Russian goods and an export levy on EU goods to Russia, with the import component being more legally straightforward.

What Tariff Rates Could Generate Revenue?

The analysis suggests tariff rates of 30–50% on EU imports from Russia could yield €11–16 billion annually under short-term scenarios. Even with long-term trade declines, revenues would remain above the €3 billion per year expected from frozen Russian sovereign assets, the study found.

The proposed tariff would target both import and export flows, broadening the revenue base. Russia’s economic losses are estimated to be three to four times greater than those of the EU, as EU imports from Russia are concentrated in energy products, while exports include diversified industrial goods like chemicals and machinery.

How Would This Affect EU Consumers and Firms?

Concerns that the tariff would harm EU consumers are less pressing after four years of war, as firms have reoriented supply chains. Those continuing to trade with Russia are doing so “by choice,” the study noted, with the tariff making the economic costs of that choice visible.

“The asymmetric cost structure makes the Ukraine Support Tariff a viable instrument for longer-term economic pressure,” said co-author Moritz Schularick, President of the Kiel Institute. The import component could build on existing EU trade rules, while the export levy would require tailored legal design.

Why Does This Matter for Ukraine and Europe?

The proposed mechanism could supplement the EU’s existing annual aid of €70 billion for Ukraine, providing critical funding for military defense, reconstruction, and humanitarian needs. It also aims to reduce Europe’s strategic vulnerabilities by turning ongoing economic ties into a pressure tool against Russia.

“This is a missed strategic opportunity to turn economic relations into an instrument that increases pressure on Russia,” Schularick said. The study emphasizes that trade diversion to China would remain limited, with extreme tariffs counterproductive due to reduced long-term revenues.