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Trump greenlights Bill proposing 500% tariff over Russia oil trade

US Senator Lindsey Graham said the Russia sanctions bill will allow US President Donald Trump to punish countries that ‘buy cheap Russian oil, fuelling Putin’s war machine’.

Written by: Shubhajit Roy, Ravi Dutta Mishra

3 min readNew DelhiUpdated: Jan 9, 2026 04:46 AM IST

India is facing a total of 50 pc tariffs on its exports to the US and this has dented its exports to one of its top export destinations. (file photo)

India is once again in the crosshairs of a proposed US law that could impose 500 per cent tariffs on countries buying Russian oil.

Veteran Republican leader and US Senator Lindsey Graham, chairman of the Senate Budget Committee, said

US President Donald Trump has “greenlit” the Russia sanctions Bill.

“This Bill would give President Trump tremendous leverage against countries like China, India and Brazil to incentivise them to stop buying the cheap Russian oil that provides the financing for (Russian President Vladimir) Putin’s bloodbath against Ukraine,” Graham said.

Also read | Disquiet on Trump’s PM remark, but Delhi chooses not to react

Titled “The Sanctioning Russia Act of 2025”, the Bill allows the administration to impose secondary tariffs and sanctions on countries that purchase Russia’s oil, gas, uranium and other exports. The legislation proposes a 500 per cent tariff on secondary purchase and reselling of Russian oil. This is meant to cut off the source of financing for much of Russia’s military actions.

The new Bill comes ahead of the US Supreme Court’s expected ruling Friday on the legality of Trump’s sweeping global tariffs. It will decide if the President has overstepped his powers granted under the International Emergency Economic Powers Act (IEEPA). The US District Court for the Northern District of Illinois, the US Court of International Trade (CIT) and the US Court of Appeals for the Federal Circuit have already ruled against the Trump administration on the IEEPA issue.

It also comes ahead of the arrival in India of new US Ambassador Sergio Gor. He is expected to reach India over the weekend and assume charge on January 12.

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Also read | ‘It was important to make me happy’: Donald Trump says US could raise tariffs on India over Russian oil purchases

Earlier this week, Graham said Vinay Kwatra, India’s Ambassador to the US, informed him about Delhi reducing its purchases of Russian oil and asked him to convey to Trump to “relieve the tariff” imposed on India.

Trump said Prime Minister Narendra Modi knew he was not happy with India’s purchase of Russian oil and that Washington could raise tariffs on Delhi “very quickly”.

Also read | ‘India would stop buying Russian oil by end of year’: Trump reiterates claim India will cut Russian oil import

The successful passage of the Bill could hurt India’s interests the most since it is yet to sign a trade deal with the US. The imposition of 50 per cent tariffs on India last year has impacted exports of labour-intensive sectors such as textiles, footwear and marine products. If the Bill is passed, it will weaken India’s negotiating position and Delhi will come under pressure to diversify goods exports away from the US.

India is negotiating trade pacts with the European Union, the ASEAN, Chile, Peru, Australia, Bahrain, the Gulf Cooperation Council (GCC), the Eurasian Economic Union (EAEU), Canada and the Southern African Customs Union (SACU). A weaker negotiating position typically results in steeper asks by partner countries.

Shubhajit Roy

Shubhajit Roy, Diplomatic Editor at The Indian Express, has been a journalist for more than 25 years now. Roy joined The Indian Express in October 2003 and has been reporting on foreign affairs for more than 17 years now. Based in Delhi, he has also led the National government and political bureau at The Indian Express in Delhi — a team of reporters who cover the national government and politics for the newspaper. He has got the Ramnath Goenka Journalism award for Excellence in Journalism ‘2016. He got this award for his coverage of the Holey Bakery attack in Dhaka and its aftermath. He also got the IIMCAA Award for the Journalist of the Year, 2022, (Jury’s special mention) for his coverage of the fall of Kabul in August 2021 — he was one of the few Indian journalists in Kabul and the only mainstream newspaper to have covered the Taliban’s capture of power in mid-August, 2021. ... Read More

Ravi Dutta Mishra

Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, specializing in economic policy and financial regulations. With over five years of experience in business journalism, he provides critical coverage of the frameworks that govern India's commercial landscape. Expertise & Focus Areas: Mishra’s reporting concentrates on the intersection of government policy and market operations. His core beats include: Trade & Commerce: Analysis of India's import-export trends, trade agreements, and commercial policies. Banking & Finance: Covering regulatory changes and policy decisions affecting the banking sector. Professional Experience: Prior to joining The Indian Express, Mishra built a robust portfolio working with some of India's leading financial news organizations. His background includes tenures at: Mint CNBC-TV18 This diverse experience across both print and broadcast media has equipped him with a holistic understanding of financial storytelling and news cycles. Find all stories by Ravi Dutta Mishra here ... Read More

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