US to call on G-7 to tariff China, India over Russian oil: FT

US to call on G-7 to tariff China, India over Russian oil: FT

US President Donald Trump has urged the European Union to impose tariffs of up to 100 percent on India and China, aiming to increase pressure on Russia to end its war in Ukraine. This request was made during a meeting in Washington between senior US and EU officials, as reported by the Financial Times on September 10, citing officials familiar with the discussions .

The push for tariffs follows growing ties between Russian President Vladimir Putin, Chinese President Xi Jinping, and Indian Prime Minister Narendra Modi at a recent summit. Trump's demand for tariffs on India and China comes amidst frustration in the White House over stalled peace talks and Russia's intensifying airstrikes on Ukraine. Trump indicated plans to speak with Putin "this week or early next week."

The US has previously raised tariffs on Indian imports to 50 percent over Russian oil purchases. European capitals were discussing potential secondary sanctions against countries such as China and India for buying Russian oil and gas but remain cautious due to trade concerns. US officials stressed that any punitive measures against Russian energy buyers would need EU support.

"China is setting up a system to import regular shipments of liquefied natural gas (LNG) from Russia’s Arctic LNG 2 project, which is sanctioned by the US," Bloomberg reported, potentially testing Washington's willingness to penalize Beijing . This move could lead to a small reduction in Russian crude exports to India in October, according to analysts and trade sources.

The European Commission is considering a faster phase-out of Russian fossil fuels as part of new sanctions against Moscow. The EU's sanctions envoy and an EU team are in Washington to discuss possible further sanctions. Indian importers of Russian oil are pushing for bigger discounts from Russian sellers as the potential risks from participating in the trade rise. Some Russian sellers have responded by sending spot cargoes to China instead, which would lead to a slight decline in volumes for India.

The price cap scheme, designed to limit the price that importers could pay for Russian oil while keeping shipments flowing, is at odds with Trump's demand for a halt in the trade. The scheme effectively encouraged India and China to buy the oil at discounted prices, but Trump's tariffs aim to force Moscow to make peace in Ukraine.

The growing policy divide between the US and the EU on Russian oil exports to India is likely to play out in a small reduction in crude flows in October. The EU has lowered the price cap for Russian oil from October, allowing Western insurers and shippers to provide services only if crude is sold below $47.60 a barrel. The US did not support the cut in the price cap, which could further increase confusion for market participants and potentially weaken levels of compliance.

The US and EU could make serious moves to choke Russia’s oil and gas industry, but these moves would be extremely disruptive to global economic activity. The lower price cap would make it harder for Western shippers to continue facilitating the trade. Russia is also using tankers from the so-called shadow fleet, which operates outside of the price cap scheme, to sell most oil above the price cap.

In conclusion, the US's call for tariffs on China and India over Russian oil is a strategic move to increase pressure on Russia to end its war in Ukraine. The policy divide between the US and the EU on Russian oil exports could lead to a small reduction in crude flows to India in October and increased confusion for market participants. The effectiveness of these sanctions remains to be seen.

: United24Media, "Trump Urges EU to Impose Up to 100 Tariffs on India and China to Pressure Russia," September 10, 2025.
: Bloomberg, "China Sets Up LNG Import System from Russia's Arctic LNG 2 Project," September 10, 2025.