22:53 (IST) Jul 31

India’s purchases of Russian oil are helping to sustain Moscow’s war efforts in Ukraine and it is “most certainly a point of irritation” in New Delhi’s relationship with Washington, US secretary of state Marco Rubio said on Thursday.

“Look, global trade – India is an ally. It’s a strategic partner. Like anything in foreign policy, you’re not going to align 100 per cent of the time on everything,” Rubio said in an interview with Fox Radio.

Rubio was responding to a question on President Donald Trump’s announcement of the 25 per cent tariff on India and an additional penalty for buying Russian military equipment and energy, and how disappointed Washington is with Delhi because of this.

Rubio acknowledged India has “huge energy needs and that includes the ability to buy oil and coal and gas and things that it needs to power its economy like every country does, and it buys it from Russia, because Russian oil is sanctioned and cheap and – meaning they have to – in many cases, they’re selling it under the global price because of the sanctions.”

He added that “unfortunately, that is helping to sustain the Russian war effort. So it is most certainly a point of irritation in our relationship with India – not the only point of irritation. We also have many other points of cooperation with them.

“But I think what you’re seeing the President express is the very clear frustration that with so many other oil vendors available, India continues to buy so much from Russia, which in essence is helping to fund the war effort” and allowing this war to continue in Ukraine.

His comments came a day after Trump announced the imposition of a 25 per cent tariff on all goods coming from India starting August 1, plus an unspecified penalty for buying Russian crude oil and military equipment.

Hong Kong CNN —

US President Donald Trump is trying again to end the war in Ukraine – not by targeting Russia, but by hitting the countries that buy Russia’s oil.

Top of that list? China and India, two of the world’s most important economies.

The US could slap those countries with economic penalties, Trump said, if Russia doesn’t agree to make peace within a 50-day limit.

That could roil not just two of Asia’s biggest markets but, by extension, the entire world, as India and China scramble to shore up supplies and find different oil sources – to avoid potentially hefty US tariffs or other sanctions.

Russia made about $192 billion last year from selling oil, according to the International Energy Agency. Cutting that off could be effective – but also expensive, and not just for Moscow. Oil prices could spike globally if Russia’s more than 7 million exported barrels of oil per day abruptly disappear.

Oil markets haven’t reacted much to Trump’s threat yet, largely because of uncertainty around whether Trump will follow through and, if so, how.

China on Tuesday also appeared unfazed. A spokesperson for its foreign ministry told reporters that “coercion” wouldn’t end conflict in Ukraine. At a media briefing Thursday, an Indian external affairs ministry spokesperson said the government was closely following developments on the issue but called securing energy needs an “overriding priority” and cautioned “against any double standards on the matter.”

But using heavy tariffs to stop countries buying Russian oil would be a blunt tool – and while they could significantly squeeze Russia’s war funding, they could also unleash more havoc on the rest of the world.

A ‘sledgehammer’

In the wake of Russian President Vladimir Putin’s invasion of Ukraine, the US, United Kingdom and European Union threw up import bans and price caps on Russian oil. But Russia’s exporters adapted quickly, rerouting the flow of the country’s vast supplies from West to East, where buyers, especially in China and India, significantly stepped up purchases of discounted fuel.

Three and a half years later, the war is grinding on. Trump, back in the White House for six months, is increasingly frustrated with Putin’s apparent disinterest in peace.

A bipartisan bill to let Trump tariff countries buying Russian energy or uranium at 500% had been gaining momentum in the Senate. Supporting lawmakers called the bill the “sledgehammer” Trump needs to end the war.

On Monday, Trump announced his own plan, saying the US was going to be doing “secondary tariffs,” with a White House official clarifying to CNN that Trump meant secondary sanctions on other countries that buy Russian oil.

“They’re secondary sanctions. It’s sanctions on countries that are buying the oil from Russia. So it’s really not about sanctioning Russia,” Matt Whitaker, the US ambassador to NATO, told CNN that day at the White House. “It’s about tariffs on countries like India and China that are buying their oil. It really is going to dramatically impact the Russian economy.”

Secondary tariffs, which experts say could mean broadly imposing duties across a country’s exports to the US, would be a relatively new tool that could give India and China strong financial incentives to stop buying Russian oil, if it appears imminent. Both countries have already been in separate trade talks with the US to negotiate down other Trump-imposed levies.

“It’s the strongest possible card from an energy perspective, at least, that the allies of Ukraine can play,” Ben McWilliams, an affiliate fellow in Energy and Climate Policy at Brussels think tank Bruegel, said of targeting Russian oil exports. “But there’s a question – even once they’ve been implemented, how serious is the US about enforcement?”

A motorist rides past an oil refinery operated in Mumbai, India, in April. Dhiraj Singh/Bloomberg/Getty Images

‘Too disruptive to use’

But playing that strong card would come with consequences, ones that Trump might not be prepared to accept, analysts say.

For one, the volumes at stake – and that could need to be replaced – are huge.

Russian crude accounts for 36% of India’s imports, and nearly a fifth of China’s, making Russia both countries’ top supplier, according to Muyu Xu, a senior oil analyst at trade intelligence firm Kpler, who cited figures for the first six months of this year, which include estimates on how much China received via pipeline.

Turkey clocks in as a distant third to those two buyers, but is a key purchaser of oil products, according to the Europe-based nonprofit Center for Research on Energy and Clean Air (CREA). Russian crude also flows to Hungary and Slovakia via pipeline under an EU exemption, the center’s data show.

“If nobody is buying Russian oil, then where can we find the supplement? OPEC has some spare capacity, but it’s difficult to ask them to pump 3.4 million barrels overnight,” said Kpler’s Xu, referring to Russia’s daily seaborne exports. “It’s just difficult to make up the market share … so we’re definitely going to see the prices go up quite a lot.”

And while that could pressure Putin, it would also pressure Trump.

“We all know that Trump dislikes high oil prices, and this is what makes this so complicated … because there is limited spare capacity, and there is limited way to compensate if there is a large disruption,” said commodity analyst Giovanni Staunovo at UBS in Zurich. “It doesn’t fit into the agenda of low oil prices.”

Limits on current spare capacity and reserves, as well as a lead time of months or years to bring more production capacity online, could make it hard to keep oil prices low, he added.

That said, the US could extend deadlines to buy time for more supplies – and sweeping tariffs may only be one tool in the Trump administration’s kit.

The president’s advisers were likely providing him “with a range of options that would include different forms of sanctions, including financial sanctions, as well as tariffs,” according to Gregory Shaffer, a professor of international law at Georgetown University.

Those could include more traditional US uses of secondary sanctions, such as targeting entities or individuals from other countries involved in the Russian oil trade, or even expanding those sanctions to have a broader set of penalties, for example on securities trading or access to American technologies in a Russian oil-purchasing countries, he said.

Already the Biden administration earlier this year imposed the harshest sanctions to date on Russia’s oil industry, blacklisting two of its largest oil companies as well as nearly 200 oil-carrying vessels.

A narrower sanctions approach than tariffs could be a more practical option, which could still have a sizable impact of disincentivizing players from the trade – if tightly enforced, experts say.

“The likelihood is that (secondary tariffs are) too disruptive for Trump to be willing to use,” according to Richard Bronze, head of geopolitics at London-based consultancy Energy Aspects. “There’s a higher chance that he’d end up using secondary sanctions, which are a more kind of targeted and well-understood tool.”

Bronze noted Trump has already issued an executive order allowing a tariff of 25% on goods from countries buying Venezuelan oil in March, but that the US president “hasn’t taken any action to impose that.”

Aerial view of the storage facilities for petrochemical resources and products in east China’s Shandong province in June. Tang Ke/Feature China/Future Publishing/Getty Images

A symbolic threat?

The threatened penalties appear to have two goals: signal to Russia that it could be starved of profits and use its trading partners to ratchet up pressure.

NATO chief Mark Rutte on Wednesday called on China, India and Brazil to “please make the phone call to Vladimir Putin and tell him that he has to get serious about peace talks.” Otherwise, Trump’s measures “will slam back” on them, he said. (Brazil accounted for about 12% of purchases of Russian oil products last month, according to CREA.)

But while observers say Moscow is closely watching this threat, Beijing and New Delhi are unlikely to want to press Putin or change course until they are absolutely sure how real Trump’s threats are. Both countries have deep strategic ties with Russia and have defended their trade in the face of accusations they are funding the war – a conflict in which both claim to have not chosen sides.

Given the scale of its Russian crude purchases, Beijing has room to barter with Trump and reduce its imports, but that won’t change China’s approach to Russia, according to Yun Sun, director of the China program at the Stimson Center think tank in Washington. “I don’t think China will be putting pressure on Russia, at least not because of US pressure” at this point, she said.

China is also used to the US looking the other way as it imports significant volumes of sanctioned Iranian oil via intermediaries.

And for India at present, the country “sees no value in giving in to US pressure on Russian oil,” said Ajay Srivastava, founder of the India-based Global Trade Research Initiative. He noted that this is just one of a list of present and future “unpredictable US demands” and shouldn’t change India’s “strategic decisions.”

Trump’s own interests in maintaining trade with these major economies provide another reason for questions about whether and what measures will ultimately come to pass.

“This (tariff threat) may be more symbolic,” said Georgetown’s Shaffer. But when it comes to the US signaling on its position on the war in Ukraine, he added, “the symbolism matters.”

A federal appeals court ruled on Friday that most of President Trump’s global tariffs were illegal. The ruling explains the president exceeded his authority in using emergency powers to impose them.

The judges allowed the tariffs to stay in place as the case continues to be adjudicated in a lower court. Friday’s decision from the US Court of Appeals for the Federal Circuit reaffirms an earlier ruling by the Court of International Trade.

Trump responded to the decision on Truth Social, saying “ALL TARIFFS ARE STILL IN EFFECT!” He also called the court “Highly Partisan” and said “with the help of the United States Supreme Court, we will use [tariffs] to benefit our nation.”

The case is expected to eventually make it to the US Supreme Court, and the Trump administration can now decide whether to appeal.

It means the “reciprocal” tariffs Trump unveiled on dozens of US trade partners (which you can see in the graphic below) now face a fresh bout of legal limbo.

Meanwhile, Brazilian President Luiz Inacio Lula da Silva has authorized plans to retaliate against the 50% US tariffs imposed by President Trump, though the Brazilian leader emphasized he is looking to negotiate with the US administration.

Separately, the $800 duty-free loophole ended Friday, with small imported packages to the US facing tariffs of 10% to 50%, depending on their origin.

Meanwhile, Mexico is set to join the US with tariffs and will raise duties on Chinese goods under its 2026 budget plan, Bloomberg reported on Wednesday. The proposal, due next month, targets cars, textiles, and plastics to shield local industries from cheap imports.

US pressure on Mexico stems from Trump’s claim that cheap Chinese goods slip into Mexico before heading north.

Also, Trump’s 50% tariffs on India have now kicked in, a move that experts say could upend a decades-long push by Washington to forge closer ties with New Delhi. Trump added an extra 25% tariff on Indian imports because of the country’s purchase of Russian oil.

The unfolding situations with both India and Mexico are the latest examples of how Trump’s tariffs are pushing countries to choose sides between the US and China.

Read more: What Trump’s tariffs mean for the economy and your wallet

Here are the latest updates as the policy reverberates around the world.

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1777 updates

Andrew here. As President Trump heads to Alaska on Friday to meet with President Vladimir Putin of Russia, we take a look at some of the negotiating points that may arise — and affect business.

We’re also thinking about reports that the U.S. may take a direct stake in Intel. It would be relatively unprecedented. On one side, the federal government has already given Intel an extraordinary amount of money in the form of subsidies via the Chips Act. On the other, making the government a shareholder raises all sorts of questions about the kind of free-market capitalism that the U.S. has been trying to export around the world.

What could it mean for the way our trading partners approach the U.S.? Will they become more protectionist and push for more of their own national champions? Or is this just a way to extract something from a struggling company?

What’s at stake

Heading into Friday’s summit meeting with President Vladimir Putin of Russia, President Trump has been trying to temper expectations. There’s a “25 percent chance this meeting will not be a successful meeting,” he told Fox News Radio on Thursday.

Will Trump’s plan to split Russia and China succeed?

As the U.S. struggles to divide its rivals, its missteps contrast with China’s deft diplomacy and Russia’s strategic craftiness.

May 9: Russian President Vladimir Putin hosting his Chinese counterpart, Xi Jinping, in Moscow for a four-day visit that centered around Russia’s ‘Victory Day’ celebrations, which commemorate the end of World War II. This trip marks the Chinese leader’s 11th visit to Russia since he took office. © Getty Images

× In a nutshell Trump’s policies reflect a flawed attempt at balancing global powers

China’s dexterity shifts the international power dynamic in its favor

Russia leverages U.S. miscalculations to strengthen alliances

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Donald Trump’s return to the White House has sparked a major global shift, with three leaders confidently staking out their spheres of influence, evoking modern imperial ambitions. The intricacies of global politics underscore that this power divide is anything but simple. The traditional concept of “the West” has largely dissolved, at least in the political sense.

This shift appears to be paving the way for improved United States-Russia relations, or at least creating conditions for such a thaw. However, it also suggests that Washington is willingly stepping back from its role as the world’s unchallenged superpower. The Trump administration seems to acknowledge, or even accommodate, the interests of countries like Russia and China. Yet, bound by the Republican Party’s longstanding traditions, President Trump has, for the time being, continued to use strong anti-communist rhetoric. It is within this context that the controversial “reverse Nixon” strategy has emerged.

Trump’s ‘reverse Nixon’ strategy

The Nixon Strategy refers to President Richard Nixon’s 1972 visit to China during the Cold War, a move that warmed U.S.-China ties and helped isolate the Soviet Union. Conversely, today’s pundits of international relations describe the Trump administration’s approach as the so-called reverse Nixon strategy, aiming to draw Russia closer as a counterbalance to China.

However, this concept does not align with historical realities. When President Nixon discreetly sent National Security Advisor Henry Kissinger to Beijing, the conflict between China and Russia had already reached a point of no return. At that time, the U.S. government simply capitalized on the evolving situation. This scenario contrasts sharply with the current state of Sino-Russian relations. First, Russian President Vladimir Putin and Chinese President Xi Jinping share an unprecedented personal bond, having met over 40 times since 2013. Second, the war in Ukraine has intertwined Russia and China’s interests more tightly than ever before.

In an interview with Breitbart News, President Trump asserted that if improving U.S.-Russia relations could lead Moscow to “disengage from China,” it would be “a good thing.” Following his discussions with President Putin, Mr. Trump told Fox News, “As a student of history, I’ve looked at all of history – the first thing you learn is that you don’t want Russia and China to go together.” However, his perspective on geopolitics seems muddled, or at the very least, inconsistent.

Oct. 24, 2024: Presidents Putin and Xi at the BRICS summit in Kazan, Russia. At the event, the Chinese leader praised Beijing’s “profound friendship” with Moscow. © Getty Images

Elbridge Colby, the U.S. undersecretary of defense for policy, suggested that the White House’s focus should primarily be on the Indo-Pacific region. During a Senate hearing on March 4, he referred to China as “the biggest and strongest adversary that the United States has had in probably 150 years.”

The Trump administration’s reverse Nixon strategy aims to divide China and Russia, yet it seems to overlook the robust economic partnership and mutual benefits binding Beijing and Moscow.

Beijing goes from worried to confident

Upon taking office in January, Mr. Trump adopted a notably conciliatory approach toward President Putin, often engaging with him in a highly amicable manner. In return, the Russian leader frequently expressed positive sentiments about his American counterpart, suggesting a potential for rapid improvement in relations between Moscow and Washington. This dynamic has unfolded alongside U.S. efforts to mediate peace in the ongoing Ukraine conflict. The shift in U.S.-Russia engagement has caused great consternation among China’s political elite.

However, Russia has responded with dissatisfaction to the White House’s design for peace in Ukraine, appearing reluctant to fully align with this vision. President Putin’s strategic goals likely extend beyond what Mr. Trump anticipates. The Russian leader perceives Mr. Trump as manipulable, overly trusting and influenced by his confident businessman mindset. President Trump’s skeptical and at times dismissive stance toward NATO and Ukraine aligns with the Kremlin’s interests. To mitigate the economic strain of the ongoing war, Russia seeks support from countries like the U.S., particularly in easing sanctions.

President Putin intends to leverage improved U.S. relations to exert pressure on Beijing. China has capitalized on Russia’s economic challenges stemming from the war, pressing it to reduce natural gas prices and buy Chinese cars and goods. Strengthening ties with the U.S. would advance Russia’s interests.

The Trump administration’s reverse Nixon strategy aims to divide China and Russia, yet it seems to overlook the robust economic partnership and mutual benefits binding Beijing and Moscow.

Since 2025, Beijing has cautiously signaled to Moscow that there should be limits to a U.S.-Russian detente, warning that exceeding them could strain Sino-Russian relations. On April 1, Chinese Foreign Minister Wang Yi met with President Putin in Moscow, where he stated that constructive Russia-U.S. engagement could foster positive expectations amid global challenges, while describing the reverse Nixon strategy as impractical. He said, “China-Russia relations will not stand still, but will only become broader and broader. Our friendship is not oriented towards the present, but looks to the longer-term future.” He added that the two countries are “friends forever, never enemies.” Earlier in February 2022, President Xi reaffirmed the “no limits” partnership with Russia.

In Beijing’s favor, Mr. Putin remains ambivalent to Mr. Trump’s overtures. This is for two main reasons. First, Mr. Trump’s unpredictable nature and the significant opposition within the U.S. elite, including some in the Republican Party, to his approach toward Russia. Second, the likelihood of President Trump staying in power is limited to just four years, whereas the Russian and Chinese leaders’ relationship is likely to endure well beyond that timeframe.

As for the U.S., President Trump’s attempts to broker peace in the Ukraine war have hit a wall. Despite the White House’s efforts to acquiesce to President Putin’s demands, agreeing before negotiations even started to recognize Crimea as Russian territory – against Ukraine and Europe’s wishes – Mr. Putin’s ambitions surpass what Mr. Trump can offer. This makes the U.S.’s proposed peace initiatives, such as a 30-day ceasefire, impossible to implement. As a result, Moscow is even more convinced that it cannot distance itself from China.

The Russia-China alliance strengthens

Moscow’s Victory Day military parade on May 9, marking the 80th anniversary of World War II’s end, subtly showcased China and Russia’s diplomatic efforts to counter President Trump’s influence. This Victory Day celebration highlighted the growing strength of authoritarian state power. Unlike last year’s parade, which drew only seven heads of state and none in 2022 when Russia began its invasion of Ukraine, this time 27 leaders attended, even including a prime minister from a European Union state. Central to this event was China; President Putin honored President Xi as his most distinguished guest. During the event, the two nations signed agreements, deepening cooperation in areas like military, aviation and nuclear power.

Moreover, economic and trade cooperation between China and Russia has surged over the past decade, driven by tensions with the West and a multidimensional rapprochement. Bilateral trade has hit new records each year since Russia’s 2022 invasion of Ukraine. China has become Russia’s leading trading partner, especially for energy exports and advanced technology imports, leaving Moscow with few alternatives amid growing economic isolation.

× Facts & figures China-Russia trade

President Xi’s visit to Moscow aimed to strengthen ties with his Russian counterpart and demonstrate that Mr. Trump’s efforts to align Russia against China had not succeeded. The trip coincided with Beijing and Washington’s tariff negotiations in Switzerland. During the visit, President Xi included some critical or even biting remarks about the U.S. in the joint Russia-China statement, reflecting his resentment. Had the Chinese leader known that President Trump would later accommodate some of China’s demands, the statement’s tone toward the U.S. might have been less pointed.

Nevertheless, Mr. Putin’s strategic calculations differ from those of President Xi. He aims to achieve a so-called victory in the Ukraine war while simultaneously seeking to restore relations with the U.S. His goals include persuading the White House to rescind sanctions against Russia and attracting American investment to bolster its economy.

President Putin’s mindset aligns closely with President Trump’s in some ways. Based on his actions, Mr. Trump appears frustrated with peace efforts that fail to yield quick results and has often threatened to withdraw from his role as a mediator. Although internal and external pressures urge Mr. Trump to push for tougher sanctions against Moscow’s maximalist demands, he refuses to commit and continues to avoid the issue. Throughout the year, he has briefly mentioned possibly tightening sanctions on Russia, but has taken no action.

Read more by Dr. Junhua Zhang

The U.S. administration’s approach to China in the first round of the tariff war has been less confrontational than in previous years. Although President Trump imposed levies starting at 145 percent, projecting a significant threat, negotiations quickly revealed a more accommodating stance. President Xi’s tough stance proved effective, with Beijing securing nearly all its initial core demands in the U.S.-China trade talks. The U.S. applied little to no pressure on Beijing to reform its non-market economic policies, with outcomes limited to minor technical adjustments.

The 145 percent tariffs imposed on most Chinese goods were temporarily reduced to 30 percent for a period of 90 days, while Chinese duties on many U.S. goods were lowered to 10 percent. And while negotiations temporarily stalled, with each side accusing the other of backtracking, cool heads have prevailed. Beijing sees this as a win in the initial round of the trade war, interpreting it as a sign that the U.S. is backing down.

This shift highlights a key realization: Americans have come to understand that the U.S. relies on China just as much as China relies on the U.S. In fact, the economic ties between the U.S. and China are nearly as strong as those between the U.S. and Europe. Furthermore, China holds certain advantages, such as its technology and capacity for processing rare earths. Alarmingly, about 80 percent of U.S. military weapons and equipment cannot be produced without these processed rare earths, most of which currently come from China.

× Scenarios Two scenarios are likely, one more so than the other. Despite President Trump’s reverse Nixon strategy, the Russian-Chinese alliance will endure in either scenario. Most likely: Sino-Russian ties deepen, frustrating Trump The war in Ukraine will likely continue as Europe supports Ukraine to slow Russia’s advances and isolate its economy. The determination of the Ukrainian people to resist will continue to pose significant challenges for Russia. Yet the Americans will not provide weapons for a decisive victory for Kyiv. This means that Russia’s war on Ukraine will wearily continue. President Trump, with no ceasefire achieved − let alone a peace deal − will most probably completely step back from the role of mediator. Although U.S.-Russian relations will be superficially cordial during the Trump administration, President Putin will continue to align with Beijing as the Russian economy is dependent on Chinese largesse and political cover in BRICS. Mr. Trump will struggle to foster deeper cooperation between the U.S. and Russia, which will limit the White House’s ability to maintain good relations with Europe. It is predictable that rescinding sanctions across the board is not in the cards. Regarding Beijing, the situation in Washington will remain as challenging as ever. China’s hold on critical minerals remains the ace up its sleeve in trade negotiations with the U.S. and beyond, while China, with its manufacturing overcapacity, will keep leaning on the Russian market as a destination for exports. The swift development of China’s military technology and naval expansion in the Western Pacific will outpace that of the U.S. As a result, Washington will find itself in a reactive position and will not have broken the Russo-Sino alliance. Less likely: Russia tires, Trump eases sanctions but Russo-Sino alliance endures The next year and a half, leading up to the 2026 midterm elections, are crucial for the current U.S. administration. With President Putin’s ambitions for territorial expansion – aiming to control at least the Ukrainian territory east of the Dnieper River – the earliest that Russia could realistically achieve its annexation goals may be by the end of this year – according to a Chinese military expert’s assessments. However, despite reinforcements from North Korea bolstering the Russian invading force, military support from Europe to Ukraine will persist, possibly prolonging the current stalemate. In this scenario, Russian appetite to wage a costly war might weaken, particularly as the domestic economy continues to deteriorate. This could push Russian leadership to prioritize a ceasefire and seek a temporary end to the conflict in Ukraine. The Trump administration in this case will look to mend ties with Moscow, claim some sort of victory and there is a possibility that some sanctions against Russia could eventually be lifted. However, the road to negotiations will not be easy: Russia will still need China as a market for fossil fuels to prop up the state budget, China will continue exporting cars and machinery to Russia and American capital is unlikely to flow into Russia as President Putin would prefer. But Presidents Trump and Xi will engage in talks and the two sides are likely to resolve the tariff disputes, reach a tacit agreement regarding Taiwan that allows Beijing to avoid major military action or blockades of the island during the Trump presidency. Despite this, the current administration in Washington will not be able to counteract Beijing’s growth as a regional and global powerhouse and Presidents Xi and Putin will remain partners.

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