Russia plans trade sanctions against Ukraine's car tax

Russia plans to impose trade sanctions on Ukraine, affecting the latter's imports of chocolate, coal and glass in a tit-for-tat move for a Ukrainian emergency import tax on cars, which drew opposition from the World Trade Organisation.

The emergency car tax was imposed by Ukraine under the WTO "safeguard" rules, which allowed countries to protect a sector to safeguard against damage to producers from a surge in imports. However, there are strict rules about their use, which Ukraine had been accused of flouting.

By way of response, WTO members hurt by the car tax are allowed to levy an equivalent tax on Ukrainian imports.

According to Russia, its proposed tax on Ukrainian imports would come into force as soon as it was adopted by the Customs Union, which also included Kazakhstan and Belarus.

Russia is the second of five concerned WTO members that have spelt out its response to punish Ukraine over the car tax.

Turkey had revealed it planned to target Ukrainian walnuts, though other opponents of Ukraine's car tax could hurt it more, analysts pointt out.

Japan plans to raise the issue at a WTO meeting tomorrow and like the Ukraine's other opponents, the EU and South Korea, had yet to spell out how they might retaliate.