US’s new bill: Preparations to impose 500% tariff on India and China, punishment for buying oil from Russia?
A new proposed US bill has created a stir in the whole world, especially in countries like India and China which are still buying cheap oil from Russia. The aim of this bill is to isolate Russia economically and force it to have a peaceful talk with Ukraine. But this step can also have an impact on the trade deal going on between India and America. This bill is likely to be introduced in the US Senate in August and if passed, a 500% import tariff could be imposed on countries like India and China.
What is this bill?
This bill has been proposed jointly by Republican Senator Lindsey Graham and Democrat Senator Richard Blumenthal. Senator Graham told ABC News that this bill is against those countries which are buying goods or oil from Russia but are not helping Ukraine. He said, “If you are buying goods from Russia, and are not helping Ukraine, then a 500% tariff will be imposed on your products when they come to the US.”
Senator Graham also said that this bill is moving forward with the support of former President Donald Trump. During a golf game, Trump gave the green signal to Graham and said, “Now the time has come to move your bill.”
Direct target on India and China
India and China together are the biggest buyers of Russian oil. According to ABC News, both these countries import 70% of Putin’s oil, which is being used to run Russia’s war economy. India has imported crude oil worth about 49 billion euros from Russia in 2024-25 alone. Earlier India’s oil came from the Middle East, but after the Ukraine invasion, cheap Russian oil has emerged as a major source.
If this bill becomes law, it can be a huge economic blow for India. Exports of sectors such as pharmaceuticals, textiles, and IT services will be directly affected, as the US is India’s largest export market. This can also increase diplomatic tensions between the two countries.
India-America Trade Deal in Danger?
This development has come at a time when a very important trade agreement between India and the US is about to be finalized. US Treasury Secretary Scott Bessent has said that “trade deal is very close”, but there is a deadlock over some agricultural demands. A delegation from India is still in Washington where discussions are going on with US officials.
If this bill is passed, questions will also arise about the US-India trade deal. There could be pressure from the US side to stop importing Russian oil, while India has been importing that oil in its national interest.
What is the objective of the bill?
The primary goal of this bill is to weaken the economy of Russia, which largely depends on the export of oil. According to Graham, “This is an economic weapon that we will use to force Moscow into peace talks with Ukraine.”
According to the Wall Street Journal, the Trump administration previously tried to soften the bill by using “may” (optional) instead of “shall” (compulsory). Graham also said that after concerns from some European allies, he proposed a carve-out – for countries that are actively helping Ukraine.
What could happen next?
If this bill becomes law, it will not only be an economic step but will also redefine geopolitics. It will have an impact on China as well, but most of the pressure will be on India as India is a trusted strategic partner as well as a trade partner of the US.
The challenge for India will be to fulfill its energy needs without ruining its relations with the US. The US also would not want to end its relations with a democratic and emerging power like India.
Conclusion
This US bill with 500% tariff is not just an economic policy, but it is a strategic weapon that has the potential to change international diplomacy and global trade dynamics. The coming months will be critical – India will have to strike a sensible balance between its foreign policy, trade interest and energy security. Only then can it be decided how India will face this pressure – whether it will bow down or make its own way.