Trump Backs Russia Sanctions Bill: 500% Tariffs Loom for India, China Amid Oil Trade Fallout

Donald Trump endorsed the Sanctioning Russia Act of 2025, allowing the US to impose up to 500% tariffs on countries, including India and China, that import Russian oil, aiming to pressure them to cut reliance on Moscow’s crude.

US President Donald Trump has endorsed a bipartisan Russia sanctions bill that could empower the United States to impose punitive tariffs of up to 500% on nations that continue to import Russian oil, majorly affecting India and China -- two of the world’s biggest buyers of Moscow’s energy exports.

The move, announced by Senator Lindsey Graham, signals an intensified effort by Washington to economically isolate Russia amid its ongoing conflict in Ukraine and increase pressure on its trading partners to reduce reliance on Russian crude.

The Sanctioning Russia Act of 2025, which Trump has agreed to advance in Congress, targets countries that purchase discounted Russian petroleum products, under the logic that such imports help fund Russia’s military operations.

Senator Graham said the bill would give the US president “broader authority” to penalise buyers of Russian oil, with China, India, and Brazil specifically named as potential targets.

What this means for India?

For India, which at times imported as much as 35‑40% of its crude oil from Russia, the threat of steep tariffs adds a layer of complexity to its energy and trade strategy. New Delhi has already faced US tariffs -- a 50% duty on Indian goods -- linked to its continued Russian oil purchases, which Washington describes as indirectly supporting Moscow’s war efforts. Trump has publicly linked India’s energy decisions to national security concerns, warning that the oil trade “has got to stop.”

New Delhi has responded cautiously, seeking to balance energy security with diplomatic pressure. India has asked refiners to report weekly Russian oil import data as part of efforts to negotiate a trade deal with the United States and ease tensions. However, officials maintain that energy purchases are based on market realities and national interest.

Impact on China

The potential tariffs also cast a shadow over trade with China. While China has been a larger buyer of Russian energy in absolute terms, the bill’s provisions could compel Beijing to reassess its supply chains or face similar punitive measures. The sanctions proposal reflects broader US aims to limit revenues that fuel Moscow’s war machine, yet critics argue the approach could disrupt global energy markets and fuel geopolitical friction.

Economists warn that such tariffs could inflated import bills for India and force both India and China to seek alternative, potentially costlier energy sources, with ripple effects on inflation and growth. In India’s case, this might push refiners to diversify purchases from the Middle East, the US, or Brazil to avoid punitive duties.

Trade relations could also be strained as US tariffs hit key Indian export sectors, and domestic industries in both nations face uncertainty over future US market access. Meanwhile, China may leverage diplomatic engagement to mitigate impacts if targeted, potentially deepening ties with non‑Western energy suppliers.

As the bill moves closer to a Congressional vote, its fate will shape global energy dynamics, US‑Asia trade ties, and the strategic calculus around the Ukraine conflict, underscoring the complex interplay between geopolitics and economic policy in 2026.