A new bipartisan bill introduced by Senators Lindsey Graham and Richard Blumenthal seeks to impose a massive 500% tariff on Russian imports from countries that continue purchasing oil, gas, uranium, or other energy commodities. The legislation, labelled an “economic bunker buster,” aims to cut off a key revenue stream for Russia amid ongoing geopolitical tensions.
Major Importers in the Crosshairs
China and India, which account for nearly 70% of Russian energy trade, are the primary targets of this proposal. The bill’s sponsors argue that penalising these nations could force them to reduce reliance on Russian exports, weakening Moscow’s war economy. Senator Blumenthal warned that the measure could deliver a “bone-crushing” impact on global trade if enacted.
‘Russia sanctions bill impose Bone crushing penalties on China, India for buying Russian oil & fueling war’, says US Senator Richard Blumenthalpic.twitter.com/U6g7ofbwtv
— Sidhant Sibal (@sidhant) July 11, 2025
Presidential Waiver Clause Adds Flexibility
The legislation includes a presidential waiver, allowing the U.S. president to decide whether to enforce the tariffs. This provision provides flexibility, ensuring the policy can be adjusted based on diplomatic and economic considerations. Critics, however, question whether such extreme measures could strain international relations and disrupt global supply chains.
Trump’s New Tariffs Target BRICS Nations
In early July 2025, former President Donald Trump announced a bold economic policy: any country aligning with what he called “anti-American BRICS policies” would face an additional 10% tariff starting August 1. The move directly targets key players like India, China, and Brazil, all of whom participated in the recent BRICS summit in Rio de Janeiro. Trump accused the bloc of undermining the U.S. dollar by pushing for an alternative reserve currency, a strategy often referred to as de-dollarization.
The timing of this announcement was significant. BRICS leaders had just concluded discussions on reforming global institutions like the UN Security Council and the IMF, while also condemning unilateral sanctions and calling for stricter regulations on unauthorized AI use. Trump’s response was swift and uncompromising, reinforcing his stance that nations embracing such policies would face economic consequences.
500% tariff on Russian: Pressure on India and China
Adding to the tension, Trump endorsed a U.S. Senate bill proposing a staggering 500% tariff on countries importing Russian oil. While framed as a measure to penalize Russia, the policy would disproportionately impact India and China, which together account for nearly 70% of Russian oil purchases. The bill includes a waiver clause, allowing the president to exempt strategic partners, a provision that could be used as leverage in future negotiations.
This move has raised concerns in New Delhi and Beijing, where energy security remains a top priority. India, in particular, has been walking a tightrope between maintaining its long-standing relationship with Russia and navigating its strategic partnership with the U.S. The threat of such a steep tariff could force India to reconsider its energy imports, potentially disrupting global oil markets.
Brazil Hit with 50% Tariff Amid Rising Tensions
On July 9, Trump escalated the trade war by imposing a 50% tariff on Brazilian goods. The decision was justified as retaliation for Brazil’s perceived alignment with China and its vocal criticism of U.S. policies during the BRICS summit. Despite the U.S. maintaining a trade surplus with Brazil, Trump viewed the tariff as necessary to counter Brazil’s support for former President Bolsonaro and its stance on de-dollarization.
Brazil’s President Lula responded angrily, vowing to impose immediate reciprocal tariffs on U.S. goods. This clash signals a new low in U.S.-Brazil relations, with potential repercussions for agricultural exports, manufacturing, and bilateral trade. Analysts warn that a prolonged trade dispute could destabilize markets and further strain diplomatic ties.
China Faces Sanctions and Tech Restrictions
Beyond tariffs, the U.S. has continued to impose sanctions and export controls on China, citing human rights abuses in Xinjiang and national security concerns. The Treasury and Commerce Departments have blacklisted several Chinese tech companies, restricting exports of semiconductors, advanced AI, and rare-earth products.
In 2025, Trump also linked trade policy to the fentanyl crisis, slapping an additional 10% tariff on Chinese goods tied to precursor chemicals for synthetic opioids. China retaliated with a temporary 34% hike on select U.S. products, escalating the economic standoff. These measures highlight the growing divide between the world’s two largest economies, with no clear path to de-escalation.
India’s Dilemma: Balancing Geopolitics and Trade
India finds itself caught in the crossfire of these global trade wars. The 10% BRICS-related tariff could impact sectors aligned with the bloc’s economic policies, while the proposed 500% oil tariff threatens its energy security. Additionally, India still faces pressure under the CAATSA framework for its purchase of Russian S-400 missile systems, though a limited waiver was granted in 2022.
Trump has repeatedly criticized India’s trade practices, labeling the country a “tariff king” and threatening duties as high as 30% on exports like pharmaceuticals and machinery. While negotiations have been extended to August, the uncertainty has left businesses on both sides anxious about future trade terms.
Global Ripple Effects and the Future of Trade
The fallout from these policies is already being felt worldwide. De-dollarization efforts are accelerating as nations like India and China increasingly settle trade in local currencies to bypass U.S. financial pressure. Stock markets, including the S&P 500 and Dow Jones, have seen heightened volatility as investors grapple with the potential for retaliatory tariffs and supply chain disruptions.
Trade diplomacy platforms like the G7 and G20 risk losing relevance as tariffs become political weapons. Meanwhile, BRICS continues to advocate for multilateralism, positioning itself as a counterbalance to U.S. economic dominance.
August 1 marks a critical deadline, with most of Trump’s tariffs set to take effect unless exemptions are negotiated. Brazil’s promised retaliation could spark a broader trade war, while the Senate’s Russian oil bill may resurface later in the month. Critics argue that these policies could slow global growth, raise consumer prices, and fracture supply chains. Supporters, however, see them as necessary tools to counter geopolitical rivals.
As the world watches, the coming months will determine whether these measures deepen global fragmentation or force new alliances. One thing is clear: the intersection of economics and geopolitics is reshaping trade norms, with lasting consequences for emerging economies and established powers alike.