Key Takeaways
- Russia has issued a stern warning that increasing trade tariffs pose significant risks to both the U.S. and the global economy, specifically in response to potential "secondary tariffs" threatened by the United States on countries trading with Russia.
- Concurrently, Russia's Foreign Ministry has voiced deep concern over Chancellor Friedrich Merz's push for the "militarisation of Germany," as Berlin moves to dramatically increase its defense spending and accelerate military procurement.
- Germany plans to nearly double its defense spending from €90 billion in 2024 to €162 billion by 2029, aiming to become Europe's strongest conventional army in response to perceived Russian threats and U.S. pressure.
- The proposed U.S. secondary tariffs, potentially reaching up to 500% on countries buying Russian energy, could disrupt global energy markets and destabilize the economies of key Russian trade partners like China and India, despite limited direct impact on the U.S.-Russia trade balance.
Russia has recently delivered a dual message of concern regarding global economic stability and European security. On Thursday, Russian Foreign Ministry spokeswoman Maria Zakharova stated that rising trade tariffs present considerable risks for the economy of the United States and the entire world. This warning comes amidst escalating threats from the U.S. regarding new tariffs on Russia and its trading partners.
Tariff Threats Loom Over Global Economy
The Russian statement directly addresses threats from U.S. President Donald Trump, who has indicated a readiness to impose "severe tariffs" on Russia, including potential 100% secondary tariffs on nations purchasing Russian oil, natural gas, and other products, should a ceasefire in Ukraine not be achieved within 50 days. Beyond presidential threats, bipartisan legislation in the U.S. Congress, known as the "Sanctioning Russia Act of 2025," proposes even steeper tariffs, potentially up to 500%, on imports from Russia and countries involved in Russian energy trade.
While direct U.S. tariffs on Russia may have a limited immediate impact due to the already diminished trade volume—U.S. imports from Russia totaled approximately $3 billion in 2024, representing only about 0.09% of all U.S. imports—the greater concern lies with the proposed secondary tariffs. Experts caution that these secondary tariffs, targeting major economies like China and India, which are significant importers of Russian energy, could severely disrupt global energy markets and destabilize economic stability worldwide. Such measures could lead to higher energy prices for American consumers, particularly at the gas pump. The average applied U.S. tariff rate has already seen a significant increase, rising from 2.5% to an estimated 27% between January and April 2025, settling at 15.8% by June 2025.
Russia Expresses Alarm at Germany's Military Buildup
In a separate but related development, Russia's Foreign Ministry spokeswoman also expressed worry over Chancellor Friedrich Merz's stated goal of "militarisation of Germany." This concern arises as Germany embarks on a significant military buildup, with its government approving a draft law aimed at accelerating defense procurement and transforming the Bundeswehr into Europe's strongest conventional army.
Germany's defense spending is set to increase dramatically, from €90 billion ($105.5 billion) in 2024 to €162 billion ($190 billion) by 2029. Over the next five years, Germany plans to allocate €650 billion ($761 billion) to its military, aiming to reach a defense expenditure of 3.5% of its GDP by 2029, a sharp rise from the 2% NATO quota it met for the first time in three decades in 2024. This substantial increase is a direct response to Russia's full-scale invasion of Ukraine in 2022 and persistent pressure from the U.S. for European allies to contribute more to collective defense. Chancellor Merz has underscored that diplomatic avenues for resolving the Russia-Ukraine conflict have been "exhausted," pledging unwavering German support for Kyiv. The increased military spending will be financed through borrowing and budget reallocations, with net government borrowing projected to climb to €81.8 billion in 2025.
These parallel developments highlight a deepening divide in international relations, with Russia reacting strongly to Western economic pressures and military advancements, particularly within Europe.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.