Trump Signs the Graham Sanctions Act, Arming Himself With Up to 100% Tariffs on India

The news

WASHINGTON / NEW DELHI — US President Donald Trump on Friday signed into law the Lindsey O. Graham Sanctioning Russia and Iran Act, The Economic Times reported, giving the President authority to levy tariffs of up to 100% on countries that import large quantities of Russian oil and gas. The House had approved it 262-159 last Wednesday after the Senate passed it last month. The Hindu’s editorial called the law “a new and substantially different escalation”: the 50% tariff of last year rested on an Executive Order that could be rescinded the same way, whereas this Act of Congress carries “a higher order of legal permanence”, and Mr. Trump must justify in writing to Congress any waiver he grants. A waiver, in plain words, is a presidential decision not to apply the penalty to a particular country. The new tariffs would come on top of the 10% ‘forced labour’ tariffs and the 50% Section 232 tariffs on steel and aluminium; the US takes about 20% of India’s goods exports, and there are 30 days before tariffs can be levied. ET columnist Seema Sirohi noted that the waiver is not time-limited and the law has a five-year sunset clause; 152 Democrats voted no. Russia supplied more than 51% of India’s oil imports in July (The Hindu); The Economic Times put India’s August intake at 2.08 million barrels per day, a 45% share. A senior official told ET that “making India a punching bag for US foreign policy failures will be counter-productive”, noting that a Houthi blockade in the Red Sea is cutting off Saudi crude on top of the Hormuz blockade. The MEA said India remains committed to energy security for its 1.4 billion people through diversified sourcing. External Affairs Minister S. Jaishankar, due to address the 81st UN General Assembly on September 26, may raise the matter in New York; Commerce Minister Piyush Goyal visits the US at month-end. The Congress’s Anand Sharma urged the government to put the trade deal on hold, calling the move discriminatory and noting that US imports of Russian uranium and fertilisers worth over $4 billion are kept outside the Act. An Indian Express op-ed named the five largest buyers as China, India, Slovakia, Hungary and Azerbaijan; Mr. Sharma said NATO members Turkey, Hungary and Slovakia would be spared — the papers differ on who is actually exposed.

Static syllabus linkage

1. An Executive Order and an Act of Congress are not the same weapon. Under the US Constitution, Article I gives Congress the power to lay duties; Presidents act on tariffs only through powers Congress has delegated, such as Section 232 of the Trade Expansion Act, 1962 (national security) and Section 301 of the Trade Act, 1974 (unfair trade practices). A tariff imposed by Executive Order under delegated emergency powers can be withdrawn by another order and is exposed to court challenge. A tariff authority written into a specific statute is harder to challenge and harder to trade away, which is why The Hindu calls this a qualitative escalation.
2. Secondary sanctions punish the buyer, not the target. Primary sanctions stop a country’s own citizens dealing with a target state. Secondary sanctions penalise third countries that continue to deal with that target — here, buyers of Russian oil and gas. India faced the same instrument under the US Countering America’s Adversaries Through Sanctions Act, 2017 (CAATSA) over the S-400 purchase from Russia. India’s stated position is that it recognises only sanctions imposed by the United Nations Security Council.
3. The WTO argument is real but weak in practice. Article I of the GATT, 1994 requires most-favoured-nation treatment, meaning a tariff on one member must be extended to all. Country-specific penal tariffs sit uneasily with it, and Article XXI allows exceptions only for essential security interests. The WTO Appellate Body has been non-functional since December 2019 because the US has blocked appointments, so a panel ruling in India’s favour can be appealed ‘into the void’. This is why India negotiates rather than litigates.
4. Strategic autonomy is a doctrine, not a treaty. Strategic autonomy is India’s long-standing position that it will choose partners issue by issue and will not enter an alliance that constrains its choices, a descendant of non-alignment. It has no legal form; it is tested only when a partner imposes a cost. Energy is the hardest test because India imports over four-fifths of its crude requirement.

Why UPSC loves this

1. GS2 asks directly about ‘effect of policies and politics of developed countries on India’s interests’. That line of the GS2 syllabus was written for stories like this. UPSC asked in 2018 about US sanctions (CAATSA) and India’s defence purchases from Russia, and in 2019 about the impact of US withdrawal from the Iran nuclear deal on India’s energy and connectivity interests.
2. The India-US trade relationship has become a Mains staple. Questions on GSP withdrawal, tariffs and the ‘reciprocal’ trade agenda have appeared in GS2 and GS3. A candidate who can explain why a statute differs from an Executive Order, and why the WTO route is weak, will write a better answer than one who lists grievances.

Analysis

1. The Act’s real power lies in the discretion, not the 100%. “Up to 100%” means the President may choose any rate, including a low one, and may waive entirely. That makes the law a bargaining chip rather than an automatic penalty: its purpose is to extract concessions in the trade deal and on oil sourcing, as the Indian Express op-ed predicted. For India this cuts both ways. It leaves room to negotiate a low rate, as The Hindu suggests, but it also means the threat can be renewed at every point of friction for five years. A penalty that is certain can be priced; one that is discretionary hangs over every negotiation.
2. India’s leverage is thinner than in 2025. Last year the 25% oil penalty was withdrawn as trade talks progressed, which suggested that India could trade market access for relief. This time the Hormuz and Red Sea disruptions make alternatives to Russian crude scarcer and dearer, with oil above $100 a barrel. Seema Sirohi’s point is blunt: China escaped earlier pressure because it controls rare earths the US needs, while India controls no comparable chokepoint. India’s leverage is its market size and its role in US Indo-Pacific strategy, and both work slowly.
3. History suggests India will cut Russian imports quietly, whatever it says. The Hindu’s editorial records that India has usually complied with US pressure to cut oil imports from particular countries, “vocal claims of strategic autonomy aside”. Iran and Venezuela are the precedents. The likely outcome is therefore not defiance but a gradual reduction in Russian share, dressed as market-driven diversification — which is exactly the language the MEA has already chosen. The counter-view is that the scale of Russian supply, above half of imports, is too large to replace quickly without a price shock at home.
4. The double-standard charge is politically strong and legally beside the point. The Congress argues that the US buys Russian uranium and fertilisers worth over $4 billion and exempts European buyers. That is a fair charge of inconsistency, and it plays well at home. But secondary sanctions have always been selective; the US decides whom it punishes. The useful response is not to protest the inconsistency but to use it: exemptions granted to countries ‘reducing’ Russian gas show that a credible reduction path is the price of a waiver.
5. The MSME exporter bears the cost that the refiner avoids. Cheap Russian crude benefits refiners and, indirectly, the fiscal and inflation position. A 100% tariff, by contrast, would fall on garment, leather, gems and engineering exporters, most of them small firms who, as The Hindu notes, could not share the cost with buyers. The trade-off is therefore not India versus America but one Indian constituency against another, and that is how an administrator must frame it.

Administrator's brainstorm