Trump Halts Russia Tariffs Threatening India, China

The Cliff News | 17 October 2026

In a significant move offering relief to India and China, United States President Donald Trump has issued an executive order suspending a raft of sanctions and tariffs linked to Russian exports. These measures, scheduled to take effect imminently under a bill signed last month, were waived by Trump citing the "national interest" of the United States.

The directive specifically suspends the implementation of Russia-related tariffs, a decision that allows President Trump the discretion to reinstate them at a later date. The announcement comes just ahead of the expiration of a 30-day window for these sanctions to be applied.

The Graham Act's Provisions

The legislation in question, named the 'Lindsey O Graham Sanctioning Russia and Iran Act of 2026,' was signed into law by President Trump. This act aimed to curtail Russia's financial capacity to sustain its military actions, particularly its conflict with Ukraine. It targeted Russian officials, financial institutions, energy sectors, and any foreign entities providing support to Moscow's military operations.

A key provision of the act authorized President Trump to impose substantial tariffs on countries engaging in significant trade with Russia, with the objective of reducing their reliance on Russian oil and gas. The law also empowered the President to levy sanctions against prominent Russian figures, including President Vladimir Putin and other senior government officials.

Imminent Threat to Major Economies

Under the terms of the legislation, President Trump had the authority to impose tariffs of up to 100% on all goods originating from the top five purchasers of Russian crude oil. This would have directly impacted India and China, alongside Slovakia, Hungary, and Azerbaijan. Furthermore, the act permitted the imposition of 500% tariffs on all US imports of Russian energy products.

The one-month deadline for the activation of these stringent measures was set to expire on October 18, 2026, making President Trump's waiver a critical intervention for the affected nations. The potential economic ramifications for countries heavily reliant on Russian energy supplies were substantial.

Impact on India's Trade Landscape

For India, the imposition of a 100% tariff would have represented a significant additional burden on its exports. This would have been layered on top of an existing 10% tariff already imposed by the US on certain Indian imports as a penalty for the alleged insufficient measures against goods produced using forced labour. The precise economic impact of the potential new tariffs on Indian exports could only be definitively assessed once specific tariff rates were announced, but the threat alone caused considerable concern.

Earlier, India and the US experienced strained trade relations when the Trump administration imposed an additional 25% tariff on Indian imports of Russian crude. This was in addition to a reciprocal 25% tariff. While these additional tariffs were later removed in February 2026, the reciprocal tariff was reduced to 18% as part of a broader US-India trade framework agreement.

India's Stance and Diplomatic Efforts

In response to the passage of the Russia sanctions bill by the US Congress last month, India had consistently articulated its determination to safeguard its trade and economic interests. The Indian Ministry of External Affairs had issued statements emphasizing the nation's commitment to energy security for its vast population of 1.4 billion people.

New Delhi had made it clear that it would continue to ensure energy security through diversified sourcing strategies and in response to evolving market dynamics. The ministry also highlighted that discussions regarding India's oil trade with Russia had taken place at high diplomatic levels with various US interlocutors. These conversations explicitly conveyed the potential implications of such sanctions, not only for the bilateral relationship between India and the US but also for the stability of the international energy market.

Shifting US-Russia Dynamics

President Trump's decision to waive these sanctions occurs amidst a backdrop of his increasingly cordial relations with Russia and public criticism of Ukrainian President Volodymyr Zelensky. Trump has, on several occasions, suggested that Ukraine might benefit from new leadership capable of brokering a peace deal with Russia.

Just last week, President Trump announced an agreement with Russian President Vladimir Putin to facilitate the supply of Russian diesel fuel to the United States. This deal involved an immediate shipment of over 300,000 tonnes of diesel, with further shipments planned for the coming months. Ukrainian President Zelensky had publicly criticized this US-Russia diesel deal, describing it as "unworthy of our partners" and a "weak decision." He further alleged that Moscow's subsequent actions, including attacks on Ukraine, were a form of "thanks" for this agreement.

In contrast, President Trump reiterated his view that it was time for Ukraine to have a new president, citing President Zelensky's perceived inability to reach a resolution to the ongoing conflict with Russia. Trump stated, "I suggest they get a new leader who can make a deal. For some reason (Zelensky) never does."