The Ukraine Support Tariff: How Europe can support Ukraine and weaken Russia

Julian Hinz and Moritz Schularick

No 212, Kiel Policy Briefs from Kiel Institute for the World Economy

Abstract: A "Ukraine Support Tariff" on the remaining €57.2 billion in EU-Russia trade could generate €6-16 billion per year at moderate rates of 30-50% (partial equilibrium) and €3-11 billion (general equilibrium) - exceeding the €3 billion from frozen Russian asset interest income. General equilibrium simulations confirm that Europe has asymmetric leverage over Russia: Russia's value added falls 3-4 times more than the EU's, making the tariff sustainable as long-term leverage. Trade diversion to China is modest. Extreme tariff rates (300%+) are counterproductive, as long-run revenue falls to near zero. Economically, we analyse a combined import tariff and export-side levy on remaining EU-Russia trade. Institutionally, the import leg is more straightforward under EU trade law, while the export leg is less straightforward and would likely require a distinct legal route. That asymmetry matters for implementation, but not for the economic logic of the combined proposal.

Keywords: Ukraine Support Tariff; EU-Russia Trade; Tariff Revenue; Laffer Curve; General Equilibrium; Ukraine-Unterstützungszoll; EU-Russland-Handel; Zolleinnahmen; Laffer-Kurve; Allgemeines Gleichgewicht (search for similar items in EconPapers)
Date: 2026
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