
Breakingviews - US can squeeze Russia without ‘secondary tariffs'
This would be to persuade India, Russia's second biggest customer, to stop buying its oil while convincing Saudi Arabia to pump more. Doing so would ensure global crude prices do not jump as Moscow's exports fall. The U.S. could also effectively slash the price that Russia gets for its foreign oil sales – going even further than the cut the European Union agreed last week. Together these measures would heap more trouble on President Vladimir Putin's economy, which is already facing strains from a mounting budget deficit, slowing growth, rising bad debts and still high inflation.
What's the problem with going the whole hog and stopping all of Moscow's oil exports? That is what Trump's threat to impose secondary tariffs on countries that trade with Russia is designed to achieve. He said last week that, if Putin did not end the war in Ukraine in 50 days, he would slap 100% tariffs on U.S. imports from states that buy Russian exports.
Such blanket secondary tariffs would have so many drawbacks that financial markets do not believe Trump will carry out his threat. Russian equities and the rouble rose after his comments, while the crude price fell – exactly the opposite of what would have happened if investors thought he was serious.
Putin's country is the world's third biggest oil producer after the U.S. and Saudi Arabia. It exported 7.2 million barrels a day of crude and refined products such as diesel in June for $13.6 billion, according to the International Energy Agency (IEA), implying an annual rate of just over $160 billion. Removing all this supply from the global market would push prices sharply higher. Among other things, that would hurt U.S. consumers, damaging Trump's popularity.
Another problem is China, which bought, opens new tab almost a third of Russia's crude exports by volume from January to May, according to data from the Kyiv School of Economics Institute. Beijing is Moscow's most important ally. So if Trump slapped 100% tariffs on Chinese imports into the United States, he probably would not change its behaviour. He would merely further inflame a trade war with the world's second largest economy and push up inflation at home.
In theory, Trump could exempt China from secondary tariffs, while imposing them on other countries. India and Turkey, which respectively buy about a quarter and a tenth of Russian crude, would be the main targets. The president might have more luck twisting their arms. But a policy that penalised friendly countries while exempting the People's Republic, the United States' most serious long-term rival, would be geopolitical folly.
Fortunately, there are alternatives. Trump could use carrots as well as sticks to persuade India and Turkey to stop buying Russian oil. Washington has extensive relationships with New Delhi and Ankara on defence, trade, technology and energy. By using multiple levers, Trump could craft win-win deals with both countries.
One carrot could be to secure alternative supplies of crude oil to global markets. This would reassure India and Turkey that they would not be paying more for their energy. It would also protect U.S. consumers from higher fuel prices.
Putin would struggle to find buyers to fully take the place of India and Turkey. By contrast, Trump has a realistic chance of getting other suppliers to fill the production gap. This would be impossible if China stopped buying Moscow's oil too.
The U.S. president's first ports of call should be Saudi Arabia and the United Arab Emirates, as he has close relations with their leaders. They have excess oil production capacity of 3.2 million, opens new tab barrels a day between them, IEA data shows, which is more than what India and Turkey buy from Russia. Both are keen to increase their share of the global market.
Trump might also be able to persuade U.S. producers, with whom he has good relations, to ramp up oil production. If there was a temporary shortfall in the market, the United States could even release oil from its strategic reserves, opens new tab. It could commit to refill that stockpile as new production came onstream, giving drillers confidence to increase supply.
Cutting the amount of oil Russia can export should be only part of Trump's plan. He should also squeeze the price at which Moscow sells its crude.
The EU last week cut the level at which Russia can export oil from $60 to $47.60 a barrel, taking advantage of the fact that prices have fallen since the Group of Seven wealthy countries agreed the original cap in 2022. If Trump throws his weight behind this initiative, it would be possible to go significantly lower.
To evade the cap, Moscow built up a "shadow fleet" of tankers that did not obey the price limit to transport its oil. G7 countries then imposed sanctions on some of these ships, making it harder for them to operate.
The U.S., which has stronger sanctions than the EU, could penalise all the tankers in Russia's shadow fleet rather than just some of them. If it can get India and Turkey to stop their Russian oil purchases, that would further drive down the price Moscow can charge.
With these measures, a price cap of around $40 a barrel may be achievable. If the volume of Russia's oil exports also fell significantly, it might be possible to halve its revenues from the black stuff.
Putin is defiant, so emptying his war chest may not be enough to force him to the negotiating table. But Trump has also promised to ramp up arms supplies to Ukraine, provided European countries pay for them. If the U.S. president keeps his promise and Europe finds the cash, perhaps by using Moscow's $300 billion of frozen assets, Russia may eventually stop the war.
Follow @Hugodixon, opens new tab on X
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Daily Record
26 minutes ago
- Daily Record
Four arrested after Trump protests across Scotland and UKIP rally
Police Scotland have confirmed that officers took action at various events across the country on Saturday and a number of people were arrested. At least four people have been arrested following a day of mass protests across Scotland. Scots turned out in force to demonstrate against Donald Trump 's visit to the country in both Aberdeen and Edinburgh, while in Glasgow a march organised by UK Independence Party (UKIP),calling for 'mass deportations' was met by hundreds of counter protesters. Police Scotland have confirmed that officers took action at various events across the country on Saturday, July 26. In Aberdeen, an 18-year-old man was arrested in connection with a number of outstanding warrants and will appear at court at a later date. While 56-year-old man will be subject of a report to the Procurator Fiscal following an alleged assault in Aberdeen city centre. In Glasgow, a 49-year-old woman was arrested in connection with an alleged obstruction of the police following an incident in George Square. A report will be submitted to the Procurator Fiscal. A 50-year-old woman was issued with a Recorded Police Warning in connection with alleged threatening behaviour in Regent Terrace, Edinburgh. Trump arrived in Scotland on Friday and took to his Turnberry golf course on the first full day of his visit. Hundreds gathered in both Edinburgh and Aberdeen – near the site of the US President's other Scottish golf resort – to make their opposition to the president known. A major security operation surrounded him, with police officers and military personnel seen scouring the grounds ahead of Mr Trump teeing off. Sniffer dogs were seen patrolling the golf course in Ayrshire, with the Navy carrying out sweeps in the water beside the seaside course, while Army vehicles were spotted on the nearby A77 road. Police Scotland has asked for support from other forces across the UK to bolster officer numbers for the high profile visit – with Mr Swinney appealing to people to protest 'peacefully and within the law'. In Glasgow, protestors came together on Buchanan Street to oppose a rally organised by UKIP. In a post announcing the march, UKIP said the demonstration would 'send a message to Holyrood that we are taking our country back,' adding: 'the people of Glasgow demand mass-deportations.' UKIP estimated 200 would attend the march through the city centre. The counter protest, attended by trade unionists, faith organisations, and other anti-racist and anti-fascists, was organised by Stand Up to Racism Scotland. Sharing a video of the demo to social media, they said: 'Hundreds of anti-fascists and anti-racists from the trade unions, community and faith organisations have answered the call to say that fascists "shall not pass" in Glasgow.'


The Sun
26 minutes ago
- The Sun
Full list of UK airline hand luggage rules explained
RYANAIR boss Michael O'Leary said this week he was considering bigger bonuses for staff who identify passengers with oversized bags. And earlier this month, a leaked email showed that staff across major airports in the UK would also receive payments for every bag confiscated from easyJet passengers ahead of boarding. So, how much can you really get away with? Sophie Swiethowski shares everything you need to know about hand-luggage restrictions for Brits' favourite airlines. EASYJET Every passenger is entitled to one free, small carry-on bag that must fit under the seat in front of them. The bag cannot exceed 45 x 36 x 20cm, including handles and wheels, and it must weigh no more than 15kg. EasyJet Plus members and those who have booked an Inclusive Plus fare (which also includes a 23kg checked bag) will be able to take a larger hand luggage bag with them, measuring up to 56 x 45 x 25cm. Anyone else wanting to take a larger carry-on will have to pay £5.99 (or more) in advance of flying. RYANAIR Ryanair has one of the smallest hand luggage allowances on this list. Like easyJet, every passenger is allowed one small, under-the-seat bag for free, measuring no greater than 40 x 20 x 25cm, although there is no specific weight limit. Larger carry-ons, to be stored in overhead lockers, cost from £6 and must not exceed 10kg. The maximum dimensions are 55 x 40 x 20cm. BRITISH AIRWAYS The UK's flag carrier has the most generous allowance of all the airlines listed here. All passengers are entitled to bring a free 'hand bag' to go under the seat. This can measure up to 40 x 30 x 15cm and has a large weight limit of 23kg, the same as checked baggage. Larger carry-ons are also included in the price of your ticket. Overhead bags can measure up to 56 x 45 x 25cm, including wheels and handles, with a weight limit of 23kg. JET2 When it comes to carry-on allowances, Jet2 is undoubtedly the winner of the low-cost airlines. Much like British Airways, customers can bring both a small and large bag on board for free. An under-the-seat bag must not exceed the limit of 40cm x 30cm x 15cm, although there are no weight restrictions. Larger bags can measure up to 56cm x 45cm x 25cm and must weigh no more than 10kg. WIZZ AIR On a par with Ryanair, the maximum dimensions for a free and smaller carry-on bag are 40 x 30 x 20cm and this bag can weigh up to 10kg. Passengers with a larger bag will have to purchase a Wizz Priority ticket if they do not want to incur a charge at the gate. The priority ticket costs from €5 (£4.33) and also includes priority boarding. These overhead-locker bags cannot exceed the weight limit of 10kg and must comply with the maximum dimensions of 55 x 40 x 23cm. 1


Glasgow Times
31 minutes ago
- Glasgow Times
UK working on plans to air drop aid into Gaza, PM tells Macron and Merz
The Prime Minister held emergency talks with Emmanuel Macron and Friedrich Merz on Saturday amid mounting global anger at the humanitarian conditions in the enclave. In a readout of the call, Number 10 said the leaders had agreed 'it would be vital to ensure robust plans are in place to turn an urgently-needed ceasefire into lasting peace'. 'The Prime Minister set out how the UK will also be taking forward plans to work with partners such as Jordan to air drop aid and evacuate children requiring medical assistance,' a Downing Street spokesperson said. However, the head of the UN's Palestinian refugee agency warned airdrops were 'a distraction and screensmoke' that would fail to reverse deepening starvation in Gaza, and could in some cases harm civilians. UNRWA chief Philippe Lazzarini said on Saturday: 'A man-made hunger can only be addressed by political will. Lift the siege, open the gates and guarantee safe movements and dignified access to people in need.' Israel said on Friday it will allow airdrops of aid by foreign countries into Gaza to alleviate suffering in the Palestinian territory, where there is widespread devastation. The readout made no mention of the issue of Palestinian statehood, which the Prime Minister has faced calls to immediately recognise after French President Mr Macron confirmed his country would do so in September. However, Downing Street said the leaders had committed to 'work closely together on a plan' to 'pave the way to a long-term solution and security in the region'. Once the proposals have been 'worked up', they will seek to advance them with other key partners, including in the region, the readout said. Some 221 MPs from Labour, the Conservatives, Liberal Democrats, SNP, Greens, Plaid Cymru, SDLP and independents have signed a letter pressuring the Government to follow suit at a UN meeting next week. Donald Trump suggested Mr Macron's announcement, which saw him commit to formally recognising Palestinian sovereignty at the UN General Assembly in September, 'doesn't matter' as he left the US for a visit to Scotland. US President Donald Trump said a French announcement on Palestinian statehood 'doesn't matter' (Robert Perry/PA) Sarah Champion, the senior Labour MP who organised the letter by parliamentarians, said recognition 'would send a powerful symbolic message that we support the rights of the Palestinian people'. Other senior Commons figures who signed the letter include Labour select committee chairs Liam Byrne, Dame Emily Thornberry and Ruth Cadbury. Lib Dem leader Sir Ed Davey, as well as Tory former minister Kit Malthouse, and Sir Edward Leigh – Parliament's longest-serving MP – also signed it. The majority of those who have signed, 131, are Labour MPs. The Government has so far said its immediate focus is on getting aid into the territory and insisted that recognising sovereignty must be done as part of a peace process. Charities operating in Gaza have said Israel's blockade and ongoing military offensive are pushing people there towards starvation, warning that they are seeing their own workers and Palestinians 'waste away'. But Mr Lazzarini said airdrops can be dangerous as they can fall on civilians, and that being able to drive aid through is more effective and safer. 'Airdrops will not reverse the deepening starvation. They are expensive, inefficient and can even kill starving civilians,' he said. 'It is a distraction and screensmoke.' The Prime Minister will meet the US president during his trip to Scotland, where he arrived on Friday evening. US-led peace talks in Qatar were cut short on Thursday, with Washington's special envoy Steve Witkoff accusing Hamas of a 'lack of desire to reach a ceasefire'. The deal under discussion is expected to include a 60-day ceasefire in which Hamas would release 10 living hostages and the remains of 18 others in phases in exchange for Palestinians imprisoned by Israel. Aid supplies would be ramped up and the two sides would hold negotiations on a lasting truce. Foreign Secretary David Lammy's opposite number Dame Priti Patel said she had 'repeatedly pressed' him on 'what specific and deliverable solutions he is trying to advance on aid'. 'The British Government needs to be leveraging its influence and the UK's considerable aid expertise to bring about practical solutions that alleviate the dire and deteriorating humanitarian situation in Gaza,' she said. 'The priority must be to get as much aid in as possible, delivered safely and exclusively to innocent civilians. 'Diplomacy is about finding solutions, not just issuing condemnations.' Meanwhile, Israel's ambassador to the UK said recognising Palestinian statehood would 'reward' hostage-taking and killing by Hamas. 'Recognising a Palestinian state in a post-October 7 reality would be nothing less than a reward for terrorism,' she wrote in the Telegraph.