Trump ‘Tax’ Attacks Russia, India At Risk?

US President Donald Trump is obsessed with proclaiming himself as a peacemaker. After repeated claims of brokering peace between India and Pakistan which were rubbished by India, he tried to bring the warring neighbouring nations Israel and Iran to the table, which also failed to bear fruit.

Now, he has shifted focus to the Russia-Ukraine conflict and as part of his efforts to bring Moscow to the table for peace talks on Ukraine, Trump’s government is planning to introduce a bill that could slap heavy tariffs, to the tune of 500%, on countries buying Russian oil. The massive tariff is aimed at stalling the flow of funds to Russia, which subsequently is believed to isolate Russia financially.

However, by introducing the bill, the US government would face the risk of diplomatic and economic fallout with key partners like India and China, even amidst negotiations for India-US trade deal underway. Both India and China still continue to trade with Russia. Republican Senator Lindsey Graham said that if nations are buying products from Russia, they were not helping Ukraine, then there’s a 500% tariff on such nations’ products reaching the US. By buying nearly 70% of Putin’s oil, these nations are keeping Russia’s war machine going, he said. The bill is likely to be introduced in August.

If enforced, it could have serious impact on India and China as they are the major buyers of discounted Russian crude. India exports IT services, pharmaceuticals and textiles, which will attract heavy tariffs. India buys Russian oil in huge quantity, having imported crude oil worth EUR 49 billion from Russia, even as its conflict with Ukraine entered into the third year. Significantly, India, which traditionally used to source its oil from the Middle East, switched to importing crude oil from Russia after it invaded Ukraine in 2022.

The proposed bill, backed by Trump, Graham and Senator Richard Blumenthal, has 84 co-sponsors and aims to coerce nations stop purchasing oil from Russia, to weaken Russia economically.

The Bill, originally proposed in March, has been delayed after opposition from a few Republicans.