Ukraine-U.S. Trade Off To Record Start In 2022— Before Russian Invasion

The good news is that Ukraine’s 2022 trade with the United States was off to a record start. The bad news that the devastating, destructive Russian invasion of Ukraine beginning last month will certainly upend that trend.

In the month of January, the only 2022 data currently available from the U.S. Census Bureau, the Ukraine registered it highest monthly total in at least two years (and likely ever) at $444.39 million. In fact, for the last five months, Ukraine trade with the United States topped $400 million, the only months it has done so in the last two years.

These are not particularly overwhelming trade volumes, of course, but Ukraine did rank as the nation’s 63rd most important trade partner in 2021, up two from the previous year and up from No. 80 as recently as 2014.

And, as important as Ukraine is to a host of exports to the world — including corn, wheat, soybeans, sunflower oil, iron ore — the United States is not particularly dependent on Ukraine for those exports, meaning the impact, as least directly, is not as significant as it might be for other countries, including European ones.

This does not suggest that the Russian invasion is of no concern to the United States; far from it. Like many people, I sit in horror day after day, night after night, as I read about and watch the destruction of a country and the atrocities being committed there.

What is does suggest is that the United States is free to act without worrying excessively about economic fallout from Ukraine, at least direct ones.

I previously wrote about the economic impact to the United States from disruptions in trade with Russia, which would largely be limited to refined petroleum products. That generally means gasoline — and Russia is the top U.S. importer of the broad category of refined petroleum products, though in its case it is largely fuel used in the maritime industry, so-called bunker fuel.

The United States does, of course, like the rest of the world, have to worry about Russia’s use of chemical, biological or nuclear weapons.

But in looking at some of the exports from Ukraine that are important to the world, it is clear they are not particularly important to the United States, at least directly.

For example, Ukraine is the world’s fifth-largest producer of corn. But the United States is the world’s largest corn producer, with more than 10 times the production.

In 2021, the value of just U.S. exports soared to a record $19.1 billion, the 11th most valuable export from the nation. It was a 37% increase from the record set a decade earlier, in 20211. Of that total, just $25,839 went to Ukraine. Our imports from Ukraine? Also diminutive: $7,139.

More than half of U.S. corn went to two nations in 2021 — China and Mexico — more than two-thirds to just three — China, Mexico and Japan.

Then there’s soybeans. Ukraine is the world’s eighth-largest producer of soybeans. Once again, the United States is the world’s largest producer, its total more than 25 times that of Ukraine.

U.S. exports of soybeans were valued at a record $27.52 billion, the second consecutive record year and the fourth year with a value in excess of $20 billion. U.S. exports to Ukraine? The total was $113,930. The United States did import soybeans from Ukraine in 2021, but only $43.9 million.

Somewhat similarly, when it comes to wheat, Ukraine is the world’s eighth-largest producer, but the United States the fourth. But the U.S. total is more than twice that or Ukraine.

Ukraine is the world’s sixth largest producer of iron ore but the United States’ ranks 11th.

Here, the United States is somewhat dependent on Ukraine — 6.1% of the 2021 total imports — but Brazil and Canada accounted for 70% of the total. U.S. exports of iron ore are smaller, about one-fourth the value of imports, and none of that total is sent to Ukraine.

Bottom line: U.S. trade with Ukraine had been growing steadily and it had been becoming a more significant trade partner. Expect that to be upended by the Russian invasion. Some of the exports for which Ukraine is known are relatively unimportant as U.S. imports, which gives the United States some latitude in its efforts to confront Russia.