US-China trade truce raises questions over Russian oil tariffs on India

The United States’ decision to extend its trade truce with China has opened a new question for India: how Washington intends to use a separate law that allows President Donald Trump to impose tariffs of up to 100% on the biggest buyers of Russian oil and gas.

US Treasury Secretary Scott Bessent said on Wednesday, 23 September, that Washington and Beijing had agreed to extend their trade truce by two months, until 10 January 2027.

The agreement came ahead of Chinese President Xi Jinping’s meeting with Trump in Washington and prevents tariffs and other trade restrictions suspended under the existing arrangement from snapping back in November.

The extension came just five days after Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which expands sanctions on Russia and gives the president new tariff powers against countries buying Russian energy.

India and China are both potentially exposed. The law covers countries that rank among the five largest importers of Russian oil or gas, as well as countries deemed to be helping Russia evade energy sanctions. It allows tariffs of up to 100%, although it does not automatically impose that rate and leaves the administration considerable discretion over which countries are targeted and what duties they face.

That gap between the treatment of Beijing and the tariff risk facing New Delhi has begun to draw criticism from Indian trade experts.

“China is among the largest buyers, yet the US-China understanding gives Beijing protection while India remains exposed,” Ajay Srivastava, founder of the Global Trade Research Initiative, said in a LinkedIn post on Friday.

Srivastava, a former Indian trade service officer, argued that the timing of the two decisions deserved attention.

“If Russian oil purchases are the issue, why does India face the tariff while China gets an exemption?” he wrote.

China has not, however, been formally exempted from the new Russia sanctions law. The US-China trade truce covers the wider tariff confrontation between Washington and Beijing and does not publicly provide Beijing with immunity from future duties imposed under the Russia legislation.

Whether the Trump administration uses the new law against China remains unresolved. China is one of the largest buyers of Russian energy and could fall within the law’s scope alongside India. The legislation itself does not identify countries by name.

India has already warned Washington about the consequences of using the measure against it.

Indian officials have told their US counterparts that another round of tariffs tied to Russian oil purchases could damage bilateral relations and complicate energy supplies. New Delhi has maintained that its purchases are based on price, availability and the energy requirements of a country that imports more than 88% of the crude it consumes.

Commerce and industry minister Piyush Goyal said this week that the government was examining the US law. The legislation is expected to move into its implementation phase within 30 days of Trump’s signature, but the administration retains scope over tariffs and waivers.

The concern in New Delhi is partly rooted in the experience of 2025. Trump imposed an additional 25% tariff on Indian goods last year over New Delhi’s purchases of Russian crude. China, despite being another major buyer of Russian energy, was not subjected to an equivalent Russia-linked tariff at the time.

Srivastava cited that episode in arguing that the latest moves risk repeating the pattern.

“The tariff threat appears aimed at forcing India to cut Russian oil purchases and sign a deeply unequal bilateral trade agreement,” he wrote.

US lawmakers backing the legislation have presented it as a way of reducing the revenue Russia earns from energy exports and increasing pressure on Moscow over the war in Ukraine.

The law nevertheless gives Trump wide latitude.

Reuters reported that the legislation represents an unusually broad grant of tariff authority and contains provisions allowing waivers on national-security grounds. It also does not spell out exactly how the largest buyers of Russian energy will be identified.

That discretion could become important if Washington tries to preserve its improving trade relationship with Beijing while pressing India to reduce Russian crude purchases.

The US and China have spent much of the past year trying to contain a tariff confrontation that at times threatened to disrupt trade between the world’s two largest economies. Their latest agreement extends a truce that had been due to expire on November 10.

Applying a new Russia-related tariff to Chinese goods could reopen that dispute. China has also made clear that it opposes secondary sanctions designed to influence its trade with third countries. Beijing has repeatedly defended its commercial relationship with Moscow and rejected US attempts to dictate where Chinese companies obtain energy.

India faces a different calculation. Russia has become its biggest crude supplier since the invasion of Ukraine, replacing a large share of purchases that previously came from the Middle East and elsewhere. Russian crude accounted for close to half of Indian oil imports at points this year, although the precise share has fluctuated from month to month.

Cutting those purchases rapidly would be difficult, particularly while supplies from the Middle East remain vulnerable to disruption.

India’s dependence on imported crude also limits how quickly refiners can change suppliers without paying more. Analysts have warned that a large shift away from Russian barrels could raise procurement costs for Indian refiners and put additional pressure on global oil prices.

That leaves the administration in Washington with a broader problem. A measure designed to squeeze Russia’s oil revenue becomes harder to apply if imposing it simultaneously on large customers such as India and China threatens trade relations, disrupts crude flows or raises fuel prices in the US.

The question now is how Trump chooses to exercise the authority Congress has given him.

Srivastava said India should resist allowing temporary tariff concessions to determine its energy policy.

“India should not trade its energy security for temporary tariff relief or let US tariff threats dictate its national energy policy,” he wrote.

With the US-China truce now running until January, New Delhi will be watching whether Washington applies the Russian-energy provisions to Beijing as well as India, grants waivers to one or both, or keeps the tariff threat in reserve while trade negotiations continue.