US Business Groups Urge Senators To Drop 100% Tariff Threat On India In Russia Bill

Nearly two dozen American business associations have warned 100 US senators that a Russia sanctions bill could sharply raise costs for US businesses and consumers by threatening tariffs of up to 100 per cent on India and four other major buyers of Russian energy, Reuters reported.

The groups asked lawmakers to drop the tariff clauses from the proposed Sanctioning Russia and Iran Act and urged Congress to curb President Donald Trump’s authority to use the measure against countries such as India. Reuters reported that the associations also pushed for tighter oversight and approval checks if any tariff power is retained. The letter was written in late July.

The warning matters because the bill links US trade penalties to other countries’ purchases of Russian oil and gas, Reuters reported. It could pull India into a wider sanctions fight even after Trump announced a trade deal with India in February that cut tariffs on Indian goods to 18 per cent from 50 per cent.

Business Groups' Warning

The signatories included the National Retail Federation, the US Council for International Business, the US Chamber of Commerce and 20 other industry groups. Reuters reported that they wrote the letter in late July and backed efforts to pressure Russia to end the war in Ukraine.

Their objection was direct. The groups told senators that tariffs of up to 100 per cent on the top five purchasers of Russian oil and gas would effectively make US importers and consumers pay for energy decisions taken by foreign governments, which American companies cannot control.

“Tariffs of this scale would increase costs for everyday consumer goods, manufacturing inputs and other products while creating significant uncertainty for companies making sourcing, pricing and inventory decisions months in advance. It could also lead to retaliatory tariffs against US exports, including agriculture,” the letter said, Reuters reported.

The associations asked Congress to put its weight behind narrower sanctions tools instead. They urged lawmakers to focus on targeted sanctions and stronger enforcement against sanctions evasion to pressure the Russian economy and its war effort in Ukraine.

Proposed Safeguards

The groups also suggested guardrails. They argued that if Congress keeps any tariff mechanism, it should be tightly framed and subject to checks.

“If Congress chooses to retain any tariff mechanism, it should be narrowly tailored, clearly defined, subject to regular review and paired with a workable off-ramp. Congress should also include provisions regarding effective oversight of any tariff-based secondary sanctions to ensure that the Administration does not use them for unintended purposes,” they wrote.

Those checks would require the Trump administration to seek approval before imposing tariffs on imports from US treaty allies and to provide regular justification for any tariffs it imposes.

Bill's Political Path

The bill has already cleared one hurdle. The US Senate approved the Sanctioning Russia and Iran Act by 86 votes to 11 and authorised Trump to impose tariffs of up to 100 per cent on countries making significant purchases of Russian oil.

Its sponsors named India as one of the five target economies. The other four are China, Slovakia, Hungary and Azerbaijan, Reuters reported. The bill, however, spared US allies in Europe for similar purchases of Russian oil, gas and other exports.

The measure now faces a harder path in the House of Representatives. Members of the opposition Democratic Party have argued that the tariff provisions hand the Trump administration too much power to levy tariffs, while Republicans remain divided and have not brought the bill to a vote.

A House vote is expected after the midterm elections in November as lawmakers leave Washington to campaign in their districts.

Signals from the administration have also been mixed. Reuters reported that US Ambassador to India Sergio Gor downplayed Trump’s support for the bill in New Delhi last month and said the White House had not publicly advocated its passage. Secretary of State Marco Rubio has said the bill would give the administration more options on Russia and criticised Democrats for holding it up in the House.