Explosive Senate proposal would hit China, India—and potentially Iran—as Washington escalates pressure on Moscow’s oil lifeline
MARKET INSIDER – European and Asian markets may be focused on AI fears, but in Washington, a different geopolitical shock is taking shape. U.S. President Donald Trump signaled strong support for a sweeping Senate proposal that would allow Washington to impose tariffs of up to 500% on countries that continue purchasing Russian oil and gas—a dramatic escalation in America’s efforts to choke off Moscow’s wartime revenues.
“Republicans are putting forward a very tough sanctions bill,” Trump said before departing Florida for the White House. The measure, long championed by Senator Lindsey Graham, is gaining momentum as frustration grows in Congress over the prolonged Russia–Ukraine conflict and the lack of diplomatic progress. Senate Majority Whip John Thune said he is prepared to bring the bill to a vote, though he has avoided committing to a firm timeline.
At its core, the proposal grants Trump the authority to slap punitive tariffs on imports from any nation deemed to be supporting Russia through energy purchases. The provision zeroes in on the world’s biggest buyers of Russian oil and gas—China and India—and Trump hinted the list could expand: “We may add Iran,” he said on Nov. 16, without elaborating.
The push for sanctions is not new. Democrats and some Republicans have pressed for harsher measures for months, accusing Russia of prolonging the war and stonewalling negotiations. Trump had previously resisted new sanctions while attempting to broker talks between Vladimir Putin and Volodymyr Zelenskyy. Their meeting in Alaska earlier this year ended without a breakthrough.
India has already felt the sting of Washington’s policy shift. In August 2025, Trump signed an order adding a 25% tariff surcharge on Indian exports—raising total duties to 50%—as punishment for buying discounted Russian crude. The move spurred New Delhi to cut back on Russian oil, and by October, Trump said he believed India had “significantly reduced” its purchases. He signaled the U.S. could ease tariffs at the “appropriate time,” reflecting a softening tone after months of tension.
Today, U.S.–India frictions over Russian oil have eased, but the new 500% tariff proposal represents a far more sweeping—and globally destabilizing—tool. If enacted, it would upend trade flows, strain relations with major emerging economies, and reshape global energy markets just as countries scramble to secure supply.
The looming question: will Washington truly weaponize tariffs at this scale—and how will China, India, and the world’s energy markets respond if it does?
