- The US plans to impose 500% tariffs on countries trading with Russia post-invasion of Ukraine
- The proposed bill, sponsored by Senator Graham, has 84 co-sponsors and targets India and China
- India's imports of Russian oil surged from under 1% to 40-44% due to discounted prices
The United States is planning to tax countries that continue to trade with Russia even after Moscow's full-scale invasion of Ukraine three years ago. According to US Senator Lindsey Graham, a Republican from South Carolina, President Donald Trump has extended support to a proposed bill calling for 500 per cent tariffs on goods from countries continuing to trade with Russia, including India and China.
Graham, who is sponsoring a tough new sanctions bill on Russia, told ABC News on Sunday that Trump told him that legislation should be brought forward for a vote after the "July break".
What's The Bill About
The sanctions bill, which, according to Graham, currently has 84 co-sponsors, aims to pressure countries like India and China into buying Russian oil and other goods to weaken Moscow's war economy and push Russian President Vladimir Putin to the negotiating table on Ukraine and give Trump "a tool" to bring that about.
"Big breakthrough here. So what does this bill do? If you're buying products from Russia and you're not helping Ukraine, then there's a 500 per cent tariff on your products coming into the United States. India and China buy 70 per cent of Putin's oil. They keep his war machine going. My bill has 84 co-sponsors. It would allow the president to put tariffs on China and India and other countries to get them -- stop them from supporting Putin's war machine, to get him to the table," the US senator told ABC.
He stressed, however, that Trump had a waiver and could decide whether or not to sign it into law if and when it passes Congress.
"I was playing with him (Trump). He says, "It's time to move -- move your bill. There's a waiver in the bill, Mr. President. You're in charge whether or not it's to be implemented." But we're going to give President Trump a tool in the toolbox he doesn't have today. After the July break, we're going to pass a bill that with allow the president," Graham added.
When Will The Bill Be Tabled
The legislation, initially proposed in March, is expected to be moved in August. It is part of America's growing efforts to tighten the economic noose around Russia as Trump struggles to drag Putin to the negotiation table while the war in Ukraine drags on.
The tabling of the bill in the Senate was delayed after the White House signalled opposition to expanding sanctions, while Trump was trying to reset ties with the Russian President. However, the administration seems ready to support the sanctions.
How The Bill Can Affect India
Amid Western sanctions, countries like India and China have continued buying discounted Russian oil, making them targets of the proposed legislation.
India, the world's third-largest oil-importing and consuming nation, bought from abroad around 5.1 million barrels of crude oil, which is converted into fuels like petrol and diesel in refineries.
India, which has traditionally sourced its oil from the Middle East, began importing a large volume of oil from Russia soon after the invasion of Ukraine in February 2022. This was primarily because Russian oil was available at a significant discount to other international benchmarks due to Western sanctions and some European countries shunning purchases.
This led to India's imports of Russian oil seeing a dramatic rise, growing from less than 1 per cent of its total crude oil imports to a staggering 40-44 per cent in a short period. In June, India ramped up purchases of Russian oil, importing more than the combined volumes from Middle Eastern suppliers such as Saudi Arabia and Iraq, amid market volatility triggered by Israel's dramatic attack on Iran.
Indian refiners were proposed to import 2-2.2 million barrels per day of Russian crude oil in June, the highest in the last two years. India's oil imports from Russia were 1.96 million barrels per day (bpd) in May.
If the US implements the proposed bill, it could lead to staggering 500 per cent tariffs on Indian products imported to America. However, India is in the process of signing a trade deal with the US, which would likely bring down US tariffs on India considerably.
Trump's Inhibition
Reports suggest the White House has previously asked Graham to soften the bill. According to a Wall Street Journal report, the Trump Administration was "quietly pressuring" the Senate to water down the legislation by turning "the word 'shall' into 'may'" wherever it appears in the text, in a move to remove the mandatory nature of the prescribed reprimands.
Following the report, Graham proposed a carve-out in the bill for countries that support Ukraine-- a move seen as an attempt to prevent a potential US-EU trade war if the legislation is enacted.
What Russia Said About The Bill
Asked about Graham's comments, Kremlin spokesman Dmitry Peskov said on Monday that Russia was aware of the US senator's stance and had taken note of his statement.
"The senator's views are well known to us, they are well known to the whole world. He belongs to a group of inveterate Russophobes. If it were up to him, these sanctions would have been imposed long ago," said Peskov.
"Would that have helped the (Ukraine) settlement (process)? That is a question that those who initiate such events should ask themselves."
