Relief for India, China as US Eases 500% Tariff

Threat Over Russian Oil

Report By Y-Trendz

Washington/New Delhi/Beijing, July 15, 2026 — India and China have won significant, if temporary, breathing room after U.S. senators unveiled a revised version of the long-pending Russia sanctions bill that dramatically scales back the punishing tariff threat originally aimed at the two countries. The updated legislation caps potential secondary tariffs on the top five buyers of Russian oil and gas at a maximum of 100%, a sharp retreat from the blanket 500% tariff that had loomed over New Delhi and Beijing for more than a year.

From 500% to 100%: What Changed

The bill, formally unveiled on Capitol Hill on Tuesday by Senators Richard Blumenthal, Jeanne Shaheen, Roger Wicker and Katie Britt, along with more than a dozen other bipartisan co-sponsors, had originally proposed an across-the-board 500% tariff on goods from any country doing business with Russia's energy sector. That figure had sparked alarm in both India and China, whose economies rely heavily on trade with the United States. The revised draft instead narrows the target list to the five largest purchasers of Russian crude — China, India, Slovakia, Hungary and Azerbaijan — and the five largest importers of Russian natural gas — China, France, Japan, Hungary and Belgium — with tariffs capped at 100% rather than the previously threatened five-fold rate.

Crucially, the bill also carves out an exemption for countries that import less than 15% of their natural gas from Russia and are already taking steps to reduce those purchases, a provision that could shield close U.S. allies such as Japan, France, Hungary and Belgium. Senators clarified that the exact tariff rate has not been finalized and will ultimately be determined by the U.S. Trade Representative rather than fixed in statute. Senator Blumenthal said he expected the rate to be set high enough to "discourage strongly" China, India and other major purchasers of Russian energy, though he declined to specify a number.

The legislation also grants President Trump waiver authority to suspend the sanctions if he judges it to be in the national interest, alongside requirements to report to Congress if tariffs are later reduced.

The Graham Legacy

The bill's momentum is closely tied to the late Senator Lindsey Graham, who spent nearly two years negotiating the measure before his sudden death last Saturday. Just a day before he died, Graham had traveled to Kyiv to brief Ukrainian President Volodymyr Zelenskyy, announcing that he had struck an agreement with President Trump to move the bill forward. Colleagues have since rallied around the legislation as a tribute to Graham, with Senator Wicker calling it "Lindsey Graham's greatest achievement" and Senator Ted Cruz urging colleagues to pass it "overwhelmingly" in his memory. Senate aides said the bill had 26 co-sponsors as of Tuesday, with more expected to sign on.

Beyond the tariff provisions, the bill imposes sweeping sanctions on Russia's shadow fleet of tankers, major Russian financial institutions including the Central Bank of the Russian Federation, and large state-owned energy ventures such as Yamal LNG and Arctic LNG.

Why India and China Matter

Together, India and China absorb more than 80% of Russia's seaborne crude exports, making them the bill's principal targets. India's position has been especially fluid. Under earlier U.S. pressure during bilateral trade talks, Indian refiners had cut Russian crude imports from roughly 1.84 million barrels per day in November 2025 to about 1.04 million barrels per day by February 2026. That pullback reversed after supply disruptions near the Strait of Hormuz pushed Indian refiners back toward discounted Russian barrels, with Russian oil accounting for roughly 47% of India's total crude imports by March 2026. New Delhi has consistently defended these purchases as a matter of energy security and consumer affordability, arguing they also help stabilize global oil prices.

China, meanwhile, overtook previous suppliers to make Russia its top crude source earlier this year, with Chinese refiners absorbing increasing volumes as Indian buyers temporarily stepped back. Beijing has not publicly responded to the revised bill, though both countries have previously described U.S. secondary sanctions as "illegitimate pressure."

What Comes Next

The bill still faces procedural hurdles, needing to clear the Senate and the House before reaching President Trump's desk. Lawmakers have acknowledged the legislation has been significantly narrowed from earlier drafts that reportedly could have applied tariffs to as many as 63 countries — a redesign senators say reflects input from the Trump administration, which has now endorsed the bill in writing. A White House official confirmed to reporters that "President Trump supports the bill."

Critics remain skeptical about the threat's credibility. Former U.S. Treasury sanctions official Catherine Wolfram has warned that India and Russia could simply "call the U.S. government's bluff" and continue trading at a discount, given the economic costs Washington would bear by following through — particularly amid ongoing trade negotiations with China. With the Senate calendar tightening ahead of the August 1 recess and midterm elections approaching, the bill's ultimate fate — and its real-world impact on Indian and Chinese energy policy — remains uncertain.