The United States’ urging of the G7 and the European Union to impose tariffs on countries that continue to buy discounted Russian oil has sharpened a fraught diplomatic episode that mixes security aims with blunt trade tools. Washington’s appeal to allies to punish buyers was presented as a way to choke off revenue to Moscow and squeeze financing for the war in Ukraine. Yet the proposal sits uneasily beside deep commercial ties, differing national energy needs, ongoing U.S. trade negotiations and Washington’s own strategic dependencies — all of which make a uniform allied tariff regime politically and practically improbable.
The policy proposal has an obvious immediate target: to reduce the flow of revenues to the Kremlin by increasing the economic cost of buying Russian crude. But it also functions as a political signal — one that forces allies, Asian buyers and the global energy market to state their positions more clearly. The ensuing debate has focused less on a simple moral calculus and more on how trade coercion is being deployed selectively, by whom, and to what end.
What Washington is proposing — and why it’s hard to turn into collective action
U.S. officials proposed coordinated tariffs on purchasers of Russian oil as a means to reduce Moscow’s export earnings. In principle, the measure would apply duties on goods from countries that continue to import significant volumes of Russian crude, thereby changing the economic incentives around acceptance of discounted barrels. Proponents argue that such a mechanism complements sanctions on shipping, insurance and price caps by attacking demand rather than supply alone.
In practice, however, multilateral implementation faces steep obstacles. Tariffs targeted at major buyers would implicate huge swathes of global trade and risk ripple effects through supply chains, consumer prices and investment flows. Different G7 and EU capitals have diverse exposure to Asian markets, distinct energy security calculations and varying legal frameworks — and some rely on revenues from long-term contracts that are difficult to unwind without heavy political cost. As a result, many governments are wary of a sweeping package that could trigger retaliation or collateral damage to their own exporters and consumers.
Moreover, the diplomatic optics are complex. The United States has already taken a unilateral approach in some cases, applying punitive duties that have strained relations with countries the administration otherwise seeks to court. That mix of negotiation and coercion complicates the project of building an allied consensus for broad tariffs.
The energy ledger: EU, China and India — who pays Russia, and how much
Numbers matter here. China has become the largest single buyer of Russian crude in recent years, with official customs data showing annual volumes that translate into millions of barrels per day — a scale that makes Beijing a major conduit of export revenues for Moscow. China’s vast refining capacity and appetite for seaborne and pipeline supplies have seen it take up the slack as Russian producers sought markets for discounted barrels.
India’s purchases have also surged dramatically. While smaller than China in absolute value, India’s imports of Russian crude climbed sharply, with some months showing flows equivalent to well over a million barrels per day — a noticeable fraction of its total oil imports and a material input for its refining and export-oriented fuels business. The combination of steep discounts on Urals-grade crude and availability of tanker routes has made Russian oil commercially attractive for Indian refineries.
Europe’s picture is different but no less consequential. The EU has reduced pipeline gas dependence since 2022, but the monetary flows have been large and persistent over time. Even with volumes down from earlier peaks, long-term contracts, spot purchases in pressured markets and payments for energy deliveries mean that Europe has continued to direct substantial sums to Russian energy exporters. Those payments — while declining in volume terms — have been high enough in dollar value to complicate Europe’s moral posture when it speaks about cutting off Russia’s revenue sources.
Taken together, the energy ledger undermines any simple narrative that singles out one or two buyers as the sole enablers. China and India account for large, growing shares of Russia’s oil exports; Europe, while reducing volumes, still channels significant payments for fossil fuels. Any policy that aims to isolate Moscow financially has to reckon with the relative scale and value of these flows — and that nuance shapes political choices.
The hypocrisy case against Washington — selective pressure, tariffs and U.S. energy dependencies
Critics have been swift to highlight contradictions in Washington’s posture. The Trump administration has already imposed heavy punitive duties on some trading partners in response to energy purchases — a prominent example being a steep additional tariff on Indian imports that doubled certain duties and roiled bilateral commerce. At the same time, the U.S. has paused or limited identical measures against other large buyers, reflecting a strategic calculus that balances coercion with a desire to keep negotiation channels open.
Beyond selective tariff application, a deeper structural inconsistency complicates U.S. moral standing. The American energy and industrial complex remains dependent on imported raw materials used in critical energy sectors — including inputs to the nuclear fuel cycle. U.S. nuclear power producers use overwhelmingly imported uranium concentrate to make reactor fuel, and a non-trivial share of such front-end materials originates in or passes through supply chains tied to Russia. That reality undercuts any claim that the U.S. is uniquely insulated from reliance on Russian-derived value chains.
So the hypocrisy argument is twofold. First, the application of tariffs and punitive trade measures has been uneven: some partners have been punished more harshly than others despite comparable or larger purchases of Russian energy. Second, Washington’s own energy and industrial requirements still rely in part on foreign-sourced raw materials that feed strategic sectors — a fact that critics say makes unilateral moral grandstanding vulnerable to charge of double standards.
That combination matters politically. Countries like India and China can point to this inconsistency when defending purchases made for domestic economic reasons. European capitals, too, can respond that their remaining energy payments to Russia reflect constrained options and transitional realities, not a lack of will. In short, the international debate over tariffs is as much about credibility and reciprocity as it is about immediate economic coercion.
Political feasibility: why G7 and EU allies are unlikely to punish India and China wholesale — and what might happen instead
Given the scale of trade relations and the practical complications outlined above, broad-based allied tariffs specifically targeting China and India remain unlikely. European governments are especially cautious: few are prepared to adopt measures that would risk retaliation or endanger their own exporters and energy security. Many EU members also have domestic political pressures and differing views on the speed and extent of decoupling from Russian energy supplies.
Moreover, the United States is simultaneously pursuing trade negotiations with both Beijing and New Delhi. Washington’s effort to keep lines of commerce and diplomacy open — even while applying targeted punitive measures — reduces the appetite for a full-throttle allied tariff regime. The mixed messaging of negotiation-plus-threat makes a sweeping collective response politically fraught.
Instead, policymakers are most likely to pursue calibrated approaches: targeted sanctions where legal and practical, reputational pressure, narrower secondary measures that aim at specific actors or sectors, and diplomatic bargaining that seeks incremental reductions rather than instant capitulation. Carve-outs, phased implementation and a focus on trackable loopholes (insurance, shipping facilitation, financial channels) are the more probable toolkit.
What emerges from this episode is an uncomfortable truth for Washington and its partners: the objective of cutting Moscow’s revenue streams collides with entrenched commercial realities, divergent national interests, and the political limits of collective action. The debate over tariffs has therefore shifted from a question of principle to a struggle over what can be enforced without creating wider economic and diplomatic damage — and whether selective pressure will be sufficient to change the behavior of major buyers.
(Source:www.financialexpresss.com)
The policy proposal has an obvious immediate target: to reduce the flow of revenues to the Kremlin by increasing the economic cost of buying Russian crude. But it also functions as a political signal — one that forces allies, Asian buyers and the global energy market to state their positions more clearly. The ensuing debate has focused less on a simple moral calculus and more on how trade coercion is being deployed selectively, by whom, and to what end.
What Washington is proposing — and why it’s hard to turn into collective action
U.S. officials proposed coordinated tariffs on purchasers of Russian oil as a means to reduce Moscow’s export earnings. In principle, the measure would apply duties on goods from countries that continue to import significant volumes of Russian crude, thereby changing the economic incentives around acceptance of discounted barrels. Proponents argue that such a mechanism complements sanctions on shipping, insurance and price caps by attacking demand rather than supply alone.
In practice, however, multilateral implementation faces steep obstacles. Tariffs targeted at major buyers would implicate huge swathes of global trade and risk ripple effects through supply chains, consumer prices and investment flows. Different G7 and EU capitals have diverse exposure to Asian markets, distinct energy security calculations and varying legal frameworks — and some rely on revenues from long-term contracts that are difficult to unwind without heavy political cost. As a result, many governments are wary of a sweeping package that could trigger retaliation or collateral damage to their own exporters and consumers.
Moreover, the diplomatic optics are complex. The United States has already taken a unilateral approach in some cases, applying punitive duties that have strained relations with countries the administration otherwise seeks to court. That mix of negotiation and coercion complicates the project of building an allied consensus for broad tariffs.
The energy ledger: EU, China and India — who pays Russia, and how much
Numbers matter here. China has become the largest single buyer of Russian crude in recent years, with official customs data showing annual volumes that translate into millions of barrels per day — a scale that makes Beijing a major conduit of export revenues for Moscow. China’s vast refining capacity and appetite for seaborne and pipeline supplies have seen it take up the slack as Russian producers sought markets for discounted barrels.
India’s purchases have also surged dramatically. While smaller than China in absolute value, India’s imports of Russian crude climbed sharply, with some months showing flows equivalent to well over a million barrels per day — a noticeable fraction of its total oil imports and a material input for its refining and export-oriented fuels business. The combination of steep discounts on Urals-grade crude and availability of tanker routes has made Russian oil commercially attractive for Indian refineries.
Europe’s picture is different but no less consequential. The EU has reduced pipeline gas dependence since 2022, but the monetary flows have been large and persistent over time. Even with volumes down from earlier peaks, long-term contracts, spot purchases in pressured markets and payments for energy deliveries mean that Europe has continued to direct substantial sums to Russian energy exporters. Those payments — while declining in volume terms — have been high enough in dollar value to complicate Europe’s moral posture when it speaks about cutting off Russia’s revenue sources.
Taken together, the energy ledger undermines any simple narrative that singles out one or two buyers as the sole enablers. China and India account for large, growing shares of Russia’s oil exports; Europe, while reducing volumes, still channels significant payments for fossil fuels. Any policy that aims to isolate Moscow financially has to reckon with the relative scale and value of these flows — and that nuance shapes political choices.
The hypocrisy case against Washington — selective pressure, tariffs and U.S. energy dependencies
Critics have been swift to highlight contradictions in Washington’s posture. The Trump administration has already imposed heavy punitive duties on some trading partners in response to energy purchases — a prominent example being a steep additional tariff on Indian imports that doubled certain duties and roiled bilateral commerce. At the same time, the U.S. has paused or limited identical measures against other large buyers, reflecting a strategic calculus that balances coercion with a desire to keep negotiation channels open.
Beyond selective tariff application, a deeper structural inconsistency complicates U.S. moral standing. The American energy and industrial complex remains dependent on imported raw materials used in critical energy sectors — including inputs to the nuclear fuel cycle. U.S. nuclear power producers use overwhelmingly imported uranium concentrate to make reactor fuel, and a non-trivial share of such front-end materials originates in or passes through supply chains tied to Russia. That reality undercuts any claim that the U.S. is uniquely insulated from reliance on Russian-derived value chains.
So the hypocrisy argument is twofold. First, the application of tariffs and punitive trade measures has been uneven: some partners have been punished more harshly than others despite comparable or larger purchases of Russian energy. Second, Washington’s own energy and industrial requirements still rely in part on foreign-sourced raw materials that feed strategic sectors — a fact that critics say makes unilateral moral grandstanding vulnerable to charge of double standards.
That combination matters politically. Countries like India and China can point to this inconsistency when defending purchases made for domestic economic reasons. European capitals, too, can respond that their remaining energy payments to Russia reflect constrained options and transitional realities, not a lack of will. In short, the international debate over tariffs is as much about credibility and reciprocity as it is about immediate economic coercion.
Political feasibility: why G7 and EU allies are unlikely to punish India and China wholesale — and what might happen instead
Given the scale of trade relations and the practical complications outlined above, broad-based allied tariffs specifically targeting China and India remain unlikely. European governments are especially cautious: few are prepared to adopt measures that would risk retaliation or endanger their own exporters and energy security. Many EU members also have domestic political pressures and differing views on the speed and extent of decoupling from Russian energy supplies.
Moreover, the United States is simultaneously pursuing trade negotiations with both Beijing and New Delhi. Washington’s effort to keep lines of commerce and diplomacy open — even while applying targeted punitive measures — reduces the appetite for a full-throttle allied tariff regime. The mixed messaging of negotiation-plus-threat makes a sweeping collective response politically fraught.
Instead, policymakers are most likely to pursue calibrated approaches: targeted sanctions where legal and practical, reputational pressure, narrower secondary measures that aim at specific actors or sectors, and diplomatic bargaining that seeks incremental reductions rather than instant capitulation. Carve-outs, phased implementation and a focus on trackable loopholes (insurance, shipping facilitation, financial channels) are the more probable toolkit.
What emerges from this episode is an uncomfortable truth for Washington and its partners: the objective of cutting Moscow’s revenue streams collides with entrenched commercial realities, divergent national interests, and the political limits of collective action. The debate over tariffs has therefore shifted from a question of principle to a struggle over what can be enforced without creating wider economic and diplomatic damage — and whether selective pressure will be sufficient to change the behavior of major buyers.
(Source:www.financialexpresss.com)