US President Donald Trump is tightening the screws on countries buying Russian oil, taking aim at India and China, the two largest importers since Europe scaled back purchases.
In a bold move, Trump slapped a 25% secondary tariff on Indian goods — on top of a previous 25% tariff — citing New Delhi’s continued purchases of Russian crude.
India and China have pushed back hard, defending their right to secure energy at affordable prices. China labeled the US action as “coercion,” while India called the new tariffs “unjustified and unreasonable,” arguing that even the EU continues limited Russian energy imports, reports dw.com
Trump’s executive order, announced Wednesday, triggered a near 1% spike in oil prices. Analysts say the tariffs could raise India’s energy bill by $11 billion, and wider secondary sanctions on entities trading with Russia are expected imminently.
Experts warn that if Russia’s 5 million barrels a day are choked off, the world could see a replay of the 2022 oil shock, when prices soared and inflation followed.
India has been a major beneficiary of cheap Russian oil, saving up to $33 billion between 2022 and 2024 thanks to deep discounts.
However, those discounts have shrunk to around $5 per barrel, making the cost-benefit calculation less attractive under tariff pressure.
Still, imports from Russia hit an 11-month high in June, showing Indian refiners are hedging against future restrictions and pricing volatility.
While India is directly in the crosshairs, China may avoid the harshest penalties. With over $580 billion in US-China trade and Beijing’s control over rare earth minerals, analysts believe Washington is reluctant to provoke a full-scale confrontation.
Nonetheless, Chinese banks have already started distancing from Russian deals, even in yuan, highlighting Beijing’s preference to protect its access to global finance while continuing to quietly import Russian oil.
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