The legislation, originally proposed by the late Senator Lindsey O. Graham and later expanded to include Iran, aims to choke financing for Russia’s war in Ukraine by targeting its leadership and major energy customers, while also extending sanctions on Iran for another five years until 2031.
Under the new Act, the United States may impose a 100% tariff on goods from a country that was among the five largest importers of Russian crude oil or natural gas in the 12 months before the law’s enactment and continues to import after a 30‑day grace period. India and China are currently the top two importers, with Russian crude accounting for more than 51% of India’s oil imports in July 2026.
The tariff would be added on top of existing duties, including a 10% tariff imposed under Section 301 for alleged forced‑labour violations and a 50% tariff under Section 232 on steel, aluminium, copper and related products, both of which already affect India.
The law requires a 30‑day waiting period before the U.S. can determine whether a country still imports Russian oil, after which the U.S. Trade Representative, in consultation with the Secretaries of State and Energy, must review the top five importers within 180 days and decide on the tariff’s continuation.
Analysts warn that a 100% tariff would severely undermine India’s export competitiveness to the United States. During the earlier 50% tariff regime (August 2025‑February 2026), Indian exporters saw a sharp slowdown in U.S. sales, with many absorbing the cost to retain customers – a strategy unlikely to be viable at double the rate.
If India chooses to cut Russian oil purchases to avoid the tariff, it could face higher fuel prices domestically, as alternative supplies would be costlier amid constrained flows through the Strait of Hormuz and oil prices above $100 a barrel. Higher fuel costs could fuel political backlash ahead of several state elections slated for next year.
The Act does provide a waiver mechanism: the president may waive the tariff after submitting a written certification to Congress that the waiver serves U.S. national interests, accompanied by a supporting report. A further exemption would arise if Russia signs a peace agreement accepted by Ukraine and ends hostilities.