Congress has sent President Donald Trump legislation which would enable additional tariffs of up to 100 per cent on goods coming from the major buyers of Russian energy. The aim of this policy is to apply pressure on Moscow, but its greatest challenge will be determining whether Washington can influence India and China without disrupting global trade or causing energy costs to rise.
The United States is advancing towards employing one of its most aggressive economic measures so far against countries that still engage in energy dealings with Russia. On September 16 the House of Representatives voted by 262 to 159 in favour of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 and forwarded the bill to Trump after the Senate had approved it 86 to 11 in August. The bill focuses on Russia’s energy and defence industries, its financial networks and also on its so-called shadow fleet of tankers which are used to transport oil despite the existing restrictions.
However, the most important aspect of the legislation might not be a sanction actually imposed on Russia. The influence that Washington could obtain from countries which keep buying Russian energy is considerable. According to an analysis by the Congressional Research Service of the legislation, the president might levy extra tariffs ranging from more than zero per cent up to 100 per cent on goods imported from certain countries that are identified as the major buyers of Russian crude oil or natural gas and also as the major facilitators of evasion of Russian oil sanctions. These tariffs would be imposed in addition to any other applicable tariffs.
What this means is that the legislation is not simply aimed at making it more difficult for Russian oil to be sold; it might force some of the world’s biggest economies to decide if it is worth risking much higher costs when selling their goods into the United States in order to gain access to discounted Russian energy.
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The strategy is important since oil is still one of the basic elements of Russia’s capacity to generate revenue abroad. The legislation is trying to deal with that system from two sides: it is applying extra pressure directly on the Russian energy and related financial networks and it is also setting up a possible economic penalty for other countries which still assist Russian oil in getting access to the world markets. According to a study by Congress, the secondary-tariff provisions apply to the five largest importers of Russian-origin crude oil or natural gas and the five countries deemed to be most involved in helping to evade the sanctions on Russian oil.
The exact tariff would not, however, be set at 100% automatically. The legislation would allow the executive branch a great deal of discretion in determining the rate. According to the Congressional Research Service, the administration could adjust the tariffs between a rate above zero and 100% depending in part on whether a country takes “significant steps” to either increase or decrease its purchases of Russian energy. The legislation does not give an exact definition of what is meant by “significant steps”. That point is important: while a 100 per cent tariff represents the highest possible rate, it does not mean that every country affected will have to face that rate.
It could therefore serve just as well as a means of negotiation as a trade restriction, Washington being in a position to increase or decrease the economic cost according to how governments change their purchases of Russian energy. Moscow is already objecting. Dmitry Peskov, a spokesperson for the Kremlin, stated on September 17 that further U.S. sanctions would make it more difficult to arrive at a peace settlement in Ukraine and described the legislation as an “unfriendly” action. Those remarks came at a time when the U.S.-mediated efforts to move forward with the negotiations had come to a standstill.
The military conflict was also continuing at a high intensity. Russia carried out an overnight attack on Ukraine by launching missiles and nearly 160 drones, Ukraine’s air force said. Over 20 people were reported to have been injured and, in response to a separate Russian attack in western Ukraine close to the Polish border, Poland got its military aircraft airborne. Polish authorities stated that no infringement of Polish airspace had been recorded. The fact that the attacks took place does not prove that they were a reaction to the congressional vote; it does, on the other hand, indicate the circumstances under which Washington is considering another major increase in economic pressure.
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The expression “100 per cent tariff” can make it appear as though Washington is imposing a tax directly on Russian oil. The mechanism is broader. Under the secondary-tariff provisions the United States had the possibility of imposing duties on goods coming from countries that are the subject of the legislation. This gives it leverage since an economy which purchases Russian energy may also place heavy reliance on access to American consumers.
India makes the dilemma obvious. According to official data quoted by Reuters, the United States was India’s biggest destination for exports, the value of Indian exports to the U.S. amounting to $42.79 billion from April to August as compared with $40.39 billion in the corresponding period the previous year. India is also the third-largest importer of oil in the world and is still one of the major buyers of Russian crude. New Delhi reacted promptly to the congressional action.
The foreign ministry of India stated that the country is still “firmly committed” to ensuring energy security and will keep on purchasing from a range of suppliers depending on market conditions. It added that India had previously warned U.S. officials of the possible effects on the bilateral relationship and the international energy markets and that it would take the necessary steps to safeguard its trade and economic interests. China has likewise raised an objection. According to a spokesperson of the Chinese foreign ministry, Beijing opposes what it sees as long-arm jurisdiction since it does not have the approval of the United Nations Security Council.
That presents the main political issue for Washington. Secondary tariffs are intended to make it more expensive to buy Russian energy indirectly, but if the major economies instead resist than change their suppliers, the conflict could shift from a dispute over sanctions to a much wider trade confrontation.
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The fact that energy prices are involved makes the calculation even more complicated. Oil is currently trading above $100 per barrel due to the conflict and the disruptions to infrastructure in the Middle East. On September 17 at 12.03 p.m. Eastern Time, the price of Brent crude was about $103.13 per barrel and that of West Texas Intermediate was $100.82, even though both reference prices had dropped during the session.
The additional crude oil shipments from Saudi Arabia via Oman have meant that concerns about shortages have been allayed in the short term. However, according to analysts interviewed by Reuters, the physical oil markets are still tight and problems relating to Saudi infrastructure, the Strait of Hormuz, shipping in the Red Sea and Russian refining capacity continue to impact the market.
That forms the most powerful counterargument against quickly restricting Russian barrels. Global crude oil prices could go up if India, China and other large buyers greatly cut back on their purchases at a time when other sources of supply are already strained, and Russian oil might also be channeled via different intermediaries rather than vanish completely from the market.
People who support the legislation say that this is exactly the reason why secondary pressure is needed. The aim is to reduce Moscow’s capacity to finance the war by getting countries and companies outside Russia to decide between going on with their energy transactions with Russia and keeping favourable access to the U.S. market. The legislation was approved by both chambers with the backing of lawmakers from both parties, even though some House Democrats opposed it on the grounds that it gives too much tariff power to the president and includes wide presidential discretion regarding implementation.
The true economic effect therefore will depend on the situation that arises after the legislation gets to Trump’s desk. Although the maximum tariff rate is dramatic, the more significant issues are the countries that the administration decides to include, the tariff rates it selects, the exemptions or reductions it allows, and whether countries like India and China alter their energy buying behaviour. If Trump approves the legislation and makes heavy use of that authority, Washington will be taking on a task greater than simply imposing another round of sanctions on Moscow.
The test will be to see if access to the American consumer market can be used as a means of altering the energy policy of some of the world’s largest economies. Since oil has already reached above $100, and since India has warned that its economic interests are in danger, China has rejected the policy’s extraterritorial application and Russia has said that further sanctions could hinder the peace efforts, the next phase of the Ukraine conflict might increasingly be fought through the use of tariffs, tankers and trade flows as well as on the battlefield.