Will the US really impose 500% tariffs on India and China for trading with Russia?

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5 days ago

A proposed US sanctions bill threatens 500 per cent tariffs on countries trading with Russia — specifically targeting India and China, which together import 70 per cent of Russian oil. Spearheaded by US Senator Lindsey Graham and backed by Donald Trump, the legislation could redefine American trade ties with India as New Delhi's rising Russian oil purchases make it a key focus read more
US Senator Lindsey Graham (R-SC) speaks to the media, after a Senate GOP lunch, on Capitol Hill in Washington, DC, US, June 28, 2025. File Image/Reuters
United States is preparing to economically target not just on Russia — but also on countries that continue commercial engagement with Moscow.
A controversial bill currently advancing in the US Senate proposes punitive 500 per cent tariffs on imports from nations that maintain trade ties with Russia, with India and China identified as primary targets due to their extensive energy imports from the Kremlin.
What the bill proposes
The proposed bill, formally introduced in March, has been championed by Republican Senator Lindsey Graham and Democratic Senator Richard Blumenthal, and now boasts 84 co-sponsors, making it one of the most broadly supported sanction initiatives since Russia's full-scale invasion of Ukraine in 2022.
'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 percent tariff on your products coming into the United States. India and China buy 70 percent of Putin's oil. They keep his war machine going,' Graham told ABC News in a Sunday interview.
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The legislation targets imports into the United States from any country that continues purchasing Russian oil, gas, uranium, petrochemicals or related commodities, unless that country is demonstrably assisting Ukraine.
The goal, as per Graham, is to drain Russia's financial capacity to continue prosecuting the war and to pressure President Vladimir Putin into entering negotiations.
'My bill has 84 co-sponsors. It would allow the president to put tariffs on China, India, and other countries to stop them from supporting Vladimir Putin's war machine and get him to the table. For the first time yesterday, the president told me … I was playing golf with him. He says, 'It's time to move your bill,'' Graham added.
How Trump is involved
US President Donald Trump endorsed the measure, according to Graham. During a recent conversation between the two — described as taking place on a golf course —Trump encouraged the senator to advance the bill post the July congressional recess.
'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 will allow the president,' Graham said.
Though the administration has now shown willingness to move forward, the bill's journey has faced internal friction.
According to The Wall Street Journal, there had been White House attempts to weaken the bill earlier in the year by shifting its language — changing 'shall' to 'may' — to make the application of sanctions discretionary rather than mandatory.
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The effort to introduce flexibility was seen as a way to protect strategic partnerships and avoid broader economic fallout, particularly with allies or nations like India that are also engaged with the US on multiple other diplomatic and trade fronts.
Reflecting this concern, Graham later proposed a carve-out for countries that are actively supporting Ukraine — an attempt to address European concerns and minimise the risk of sparking a US–EU trade conflict.
What's at stake for India
India is one of the largest consumers and importers of oil globally, sourcing around 88 per cent of its crude demand from overseas. Traditionally dependent on suppliers in West Asia, India began ramping up imports of discounted Russian oil in the aftermath of the Ukraine invasion.
This shift allowed Indian refiners to secure cheap crude, amid a reshuffling of global supply chains caused by Western sanctions on Russian energy.
In recent months, India's Russian crude imports have outpaced those from all West Asian suppliers combined.
As of May 2025, India was importing approximately 1.96 million barrels per day (bpd) of Russian crude, with estimates for June 2025 pegged even higher at 2–2.2 million bpd, the most in two years.
The most recent spike was also linked to geopolitical developments, including Israel's attack on Iran, which created market instability and prompted Indian refiners to further diversify supply by leaning more heavily on Russian shipments.
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As a result of this increased trade, India-Russia bilateral trade surged to an unprecedented $68.7 billion in FY 2024–25, up from just $10.1 billion pre-pandemic.
This dramatic rise, fuelled primarily by energy purchases and a rise in Indian exports to Russia, has led both countries to set an ambitious goal of $100 billion in total trade volume by 2030.
Data from energy tracking firm Kpler further indicates that of the 183 oil tankers recently sanctioned by the US, 75 had previously transported Russian crude to India.
How India could be hit by tariff enforcement
Should the bill become law and the 500 per cent tariff clause be enforced, India could see heavy duties imposed on a wide spectrum of its exports to the US, one of its largest trading partners.
These include critical sectors such as pharmaceuticals, textiles, automotive components and IT services.
India has so far defended its energy strategy, stating that its trade practices align with national security and economic requirements. Officials in New Delhi have pointed out that their dealings are within legal boundaries and consistent with their broader policy interests.
Meanwhile, India and the United States are in the process of negotiating a bilateral trade deal, which could reduce existing tariffs and deepen commercial ties.
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However, the proposed sanctions bill, if enforced in its current form, could complicate these negotiations or offset any gains from the trade pact.
What this means for China & how Russia responded
Alongside India, China is the other principal buyer of Russian oil and gas, accounting for a large share of the 70 per cent of Russian oil exports that the US bill seeks to disrupt.
While China has a more diversified export profile and a larger domestic market, the imposition of tariffs could further strain US-China relations, which are already tense due to disputes over technology, security and geopolitical alignment.
Reacting to Graham's proposal, Kremlin spokesperson Dmitry Peskov said Moscow was familiar with the senator's long-standing hostility toward Russia.
'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,' Peskov stated.
He also questioned whether such a policy would have any meaningful impact on peace efforts in Ukraine: 'Would that have helped the (Ukraine) settlement (process)? That is a question that those who initiate such events should ask themselves.'
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With inputs from agencies