US Senator Tariff Threats Against India

Source: Indian Express 

Introduction 

In July 2025, U.S. Senator issued stark warnings to India, China, and Brazil regarding their continued energy trade with Russia, threatening severe economic consequences through proposed tariffs. These threats represent a significant escalation in U.S. foreign policy enforcement mechanisms and raise complex questions about international trade law, sovereignty, and the extraterritorial application of American sanctions policy. 

The Proposed Legislation 

Senator has sponsored the Russian Sanctions Act of 2025, introduced in both the House and Senate with substantial bipartisan support (87 House co-sponsors and 84 Senate co-sponsors).  

Section 17 of this comprehensive legislation specifically targets countries engaged in Russian energy trade. 

Key Provisions of the Bill: 

• Authorizes the President to impose sanctions when Russia refuses to negotiate peace with Ukraine, violates peace agreements, initiates new invasions, or attempts to subvert the Ukrainian government. 
• Proposes 500% ad valorem duties on countries that buy, sell, or transfer oil, uranium, natural gas, petroleum products, or petrochemical products originating from Russia. 
• Includes provisions for blocking visas and freezing properties of top Kremlin officials. 
• Prohibits rerouting of U.S.-origin energy products to Russia. 
• Grants the President authority to waive duties for six-month periods. 

The legislation represents one of the most aggressive secondary sanctions regimes proposed against major trading partners in recent U.S. history. 

What are Tariffs ? 

• Tariffs are customs duties imposed by governments on imported goods, serving both revenue generation and trade policy objectives.  
• Countries often rely on international trade to meet resource and production needs, but face challenges like policies, geopolitics, and market competition.  
• To manage trade disputes, governments commonly impose tariffs—taxes on imports that raise prices to protect local industries and generate revenue.  
• While tariffs encourage domestic purchases, they can also increase costs for consumers who still choose imported goods. 

• Under U.S. law, tariffs are primarily governed by the Tariff Act of 1930 and subsequent trade legislation, with constitutional authority derived from Congress's power to regulate foreign commerce under Article I, Section 8. 
• Types of Proposed Tariffs: 
  • Primary Tariffs: 500% duties on direct Russian imports. 
  • Secondary Tariffs: 100-500% duties on countries trading with the U.S. while importing Russian energy products. 
  • Punitive Nature: These tariffs exceed typical protective or revenue-generating rates, serving primarily as economic sanctions. 
• While the U.S. has historically used tariffs as foreign policy tools, the proposed rates represent an unprecedented escalation. Previous examples include steel and aluminum tariffs under Section 232 national security provisions, but these typically ranged from 10-25%. 

Why Senator Graham Has Threatened 100% Tariffs on India ? 

• Senator Lindsey Graham's threat stems from India's position as Russia's second-largest oil customer, accounting for approximately 38% of Russian oil exports as of February 2025. 
• The Senator argues that India's energy purchases provide crucial revenue streams that enable Russia's continued military operations in Ukraine. 

Specific Justifications Cited: 

• War Financing Allegations: Graham contends that India, along with China and Brazil, collectively purchases about 80% of Russian crude oil exports, directly funding what he terms "Putin's war machine." 
• Economic Coercion Strategy: The 100% tariff threat represents an attempt to force India to choose between access to the American market and continued Russian energy imports. As Graham stated: "China, India and Brazil, they are about to face a choice between the American economy or helping Putin." 
• Bilateral Trade Leverage: With India-U.S. trade relations under negotiation for a "mini" trade deal, the tariff threat serves as additional pressure during ongoing discussions about market access, particularly in agriculture, dairy, and genetically modified products. 

Legal and Diplomatic Complexities: 

• India's Legal Position: India has maintained that securing energy needs for its population remains an "overriding priority" and has cautioned against "double standards," noting that European Union members continue purchasing Russian energy while also buying processed products from Indian refineries with Russian minority ownership. 
• International Law Considerations: The proposed tariffs raise questions under World Trade Organization (WTO) rules, particularly: 
  • Most Favored Nation (MFN) treatment obligations 
  • National security exceptions under GATT Article XXI 
  • Dispute resolution mechanisms for discriminatory trade measures 
• Sovereignty Concerns: India's response through MEA spokesperson Randhir Jaiswal emphasized that energy procurement decisions are guided by market availability and "prevailing global circumstances," asserting sovereign decision-making authority over energy security matters. 

What Legal and Administrative Challenges arise in Enforcing Sanctions on Russian-origin energy in global trade? 

• Congressional Approval Requirements: Current bill language requires congressional approval layers for presidential sanctions implementation, though reports suggest the Trump administration may seek revisions to enable more autonomous executive action. 
• Economic Interdependence: India-U.S. bilateral trade reached significant levels, with complex supply chains that would be disrupted by such tariffs. India has diversified its oil sources to 40 countries (up from 27 previously), indicating some preparation for potential sanctions. 
• Enforcement Mechanisms: The practical implementation of tracking and penalizing Russian-origin energy products through complex global supply chains presents significant administrative and verification challenges. 

Conclusion 

Senator Graham's tariff threats against India represent a bold but legally and diplomatically complex attempt to weaponize America's economic leverage in service of Ukraine policy objectives. While the proposed Russian Sanctions Act provides legislative framework for such measures, their implementation would likely face significant legal challenges under international trade law, strain important bilateral relationships, and create enforcement difficulties in globalized energy markets. The ultimate success of this coercive strategy will depend on whether targeted countries view the economic costs of compliance as outweighing the benefits of continued Russian energy trade, and whether the U.S. Congress and administration can navigate the complex legal and diplomatic obstacles to implementation.