AsianFin -- The United States is going to urge its allies to impose hefty tariffs on two major Russian oil buyers as President Donald Trump is considering tougher sanctions against Russia to force Moscow to end its war in Ukraine.
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The U.S. calls on the Group of Seven (G7) to levy 50% to 100% secondary tariffs on China and India for their purchases of Russian oil, Bloomberg on Friday cited a proposal. In additon to tariffs, the proposal calls for restrictive trade measures on both imports and exports to curb the flow of Russian energy and to prevent the transfer of dual-use technologies into Russia.
The U.S. will also ask G7 countries to create a legal pathway to seize immobilized sovereign Russian assets and consider seizing or using the principle of those assets to fund Ukraine’s defense, per the proposal. The move requires European allies’ greenlight and cooperation as the vast majority of the about $300 billion of Moscow’s immobilized assets are in Europe. Senior US officials have reportedly floated with European counterparts the idea of gradually seizing those frozen Russia assets to increase the pressure on Moscow to enter into negotiations.
Trump has in his second term so far refrained direct sanctions on Russia, but his remarks on Friday suggested he is losing patience after Russia the same day said negotiations with Ukraine were on “pause” despite Trump’s push for direct talks between Russian President Vladimir Putin and Ukraine's leader Volodymyr Zelenskiy.
Trump said in a Fox News interview that his patience with Putin is “sort of sort of running out and running out fast.” Calling India Russia’s “biggest customer”, Trump said he had put a 50% tariff on India because of its buying oil from Russia, and the penalty causes a rift with India.
Nevertheless, Trump threatened new economic sanctions, but added that European countries also needed to participate. "We're going to have to come down very, very strong," Trump said in reference to Russia. "Hitting very hard with sanctions, to banks and having to do with oil and tariffs.
A spokesperson for the U.S. Department of Treasury on Friday demanded “meaningful tariffs” on Chinese and Indian goods as part of actions against Russia, arguing that both countries’ continued purchases were prolonging the Russia-Ukraine war. “Chinese and Indian purchases of Russian oil are funding Putin’s war machine,” the spokesperson said, noting that such secondary tariffs will be rescinded that the war ends.
During a call on Friday, G7 finance ministers discussed further measures to increase pressure on Russia to end its war against Ukraine, according to a statement from Canada, the head of the rolling G2 presidency. The ministers agreed to speed up discussions to use frozen Russian assets to fund Ukraine's defense, and discussed a "wide range of possible economic measures to increase pressure on Russia, including further sanctions and trade measures, such as tariffs, on those enabling Russia's war effort," the statement said.
U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in the call pressed allies to match Washington's tariff measures. “Only with a unified effort that cuts off the revenues funding Putin’s war machine at the source will we be able to apply sufficient economic pressure to end the senseless killing,” said Bessent and Greer in a joint statement unveiled later Friday.
Bessent and Greer in the call reiterated Trump’s call to their G7 partners that, if they are truly committed to ending the war in Ukraine, they should join the United States in imposing tariffs on countries purchasing oil from Russia. The two officials welcomed commitments made during the call to increase sanctions pressure and explore using immobilized Russian sovereign assets to benefit Ukraine's defense, according to the joint statement.
Trump on Tuesday was reported to press the European Union to hit China and India with up to 100% tariffs during a meeting between U.S. and EU officials discussing options to double down economic pressure on Russia.
The U.S. government is considering expanding tariffs on countries buying Russian oil including India, but only if the EU takes similar steps, news agency AFP cited a U.S. official on Tuesday. Washington believes “the source of the money for the Russian war machine is oil purchased by China and India.” Trump is “ready to go” but wants the EU to act alongside the U.S., according to the official.
