Facing Russia’s refusal to negotiate, President Trump is threatening to cut off its access to energy markets. We explore the potential fallout from Washington’s moves and consider who should be hit first.
Empty threat or real deal?
In less than five and a half months, Moscow managed to sour relations with the new U.S. administration, which had initially seemed open to engagement. Early on, it appeared that Putin and his inner circle could comfortably maintain this frosty dynamic for years. Yet, the Kremlin refused to make even symbolic concessions to Washington—a move they may soon come to regret.
President Trump’s threat to impose 100% tariffs on countries trading with Moscow has drawn attention for its unpredictability. In theory, such a move could cut off Russia from a significant portion of its oil and gas revenues—accounting for roughly 30% of the country’s state budget. But details remain scarce, with little clarity on which countries might be targeted or which goods and services would be subject to the tariffs.
It’s likely the approach would mirror a bill introduced by Senators Lindsey Graham, a Republican, and Richard Blumenthal, a Democrat. That bill proposed staggering 500% tariffs on countries importing key Russian products like oil, uranium, natural gas, and petroleum derivatives. At the time, The Ukrainian Week flagged the impracticality of this proposal, given that many major U.S. allies and partners—including the European Union, Japan, South Korea, and Taiwan—are among Russia’s largest customers for these goods.
Reluctant to jeopardise relations with its allies, Congress ultimately decided against passing the bill. Instead, the president will maintain the authority to impose tariffs at his discretion, much like the way he currently applies them against various countries around the world. This approach provides the flexibility to penalise certain countries such as China and India, while deliberately refraining from targeting European nations—effectively allowing both Europe and these other countries to continue trading with Russia despite the growing tensions.
On the verge of an oil crisis
If Trump follows through on his threats, those targeted will face a stark choice. The first option: halt purchases of Russian goods and scramble to find alternative suppliers. For many of Moscow’s clients, this would be a more manageable cost than losing access to the vast American market.
The second option: continue trading with Russia and accept the hit of steep U.S. tariffs. It’s worth emphasizing from the start that covert trade on a large scale is virtually impossible—especially given the difficulty of hiding massive maritime shipments of oil.
Opting for the first route would almost certainly send shockwaves through the global energy market. Russia ranks among the world’s top producers and exporters of energy, comprising nearly 9.5% of the crude oil market in 2023. A serious response to the threat of U.S. tariffs would effectively remove a significant chunk of that supply from the market, shrinking global availability and pushing prices higher.
Countries around the world now face an incredibly tough dilemma: either bow to U.S. demands and avoid tariffs—while bearing the brunt of higher energy prices—or keep trading with Moscow and lose access to the American market altogether, since a 100% tariff is essentially an embargo.
In the end, it looks like a lose-lose situation for everyone—except Ukraine. Naturally, Ukrainians will feel the impact of rising global energy costs, especially given already high inflation (14.3% as of early August, according to the National Bank). But more than anything else, cutting off Russia’s energy revenues will accelerate the collapse of its economy—and with it, its war machine. For that reason, we’re strongly invested in seeing Trump follow through on his threats in full.
Who will the US go after?
As Washington contemplates its next move, the spotlight turns to how Russia’s main trading partners will respond. Their reactions to U.S. pressure will play a critical role in determining whether Moscow can continue to finance its war effort. With each country balancing its own unique mix of interests and risks, their responses are likely to diverge.
China’s reaction will be the most significant. It is by far Russia’s largest trading partner and the biggest buyer of its oil. By purchasing discounted Russian energy, China enjoys substantial economic advantages. Beijing has been steadily developing the necessary infrastructure to support this, including the Power of Siberia gas pipeline, which started operating in 2019.
There’s no doubt China won’t cut off Russian energy supplies immediately, even under the looming threat of heavy U.S. tariffs. Earlier this year, Beijing resisted pressure from Washington, which threatened tariffs as high as 145%, ultimately shifting the trade war toward negotiations.
Xi Jinping and his team likely don’t see the latest threats as an immediate risk, so any response from China won’t come right away.
Beijing may only start scaling back trade with Russia once it truly begins to feel the pain of losing access to the American market. Even then, there’s no guarantee that China’s geopolitical priorities—particularly its reluctance to lose Russia as a junior partner in the battle for global influence—won’t outweigh the economic fallout.
India has emerged as another steadfast ally for Russia. Since 2022, this former British colony has extended a significant lifeline to Moscow, becoming the world’s second-largest consumer of Russian oil. Between 2022 and 2024, trade between Russia and India, previously modest, soared to nearly $72 billion—$67 billion in imports and just $5 billion in exports. Indian purchases of Russian oil and fossil fuels alone account for nearly $60 billion, or 83% of that total. Beyond energy, India supplies Russia with auto parts, electronics, and military or dual-use equipment. Indian exports of these goods to Russia have jumped 88% over the past two years. Reports also suggest Russia is buying back military products it had earlier sold to India.
Still, Russia represents a tiny fraction of India’s exports—just 1.1% in 2024. By comparison, the U.S. dominates, accounting for 18% of India’s exports last year, or $79.4 billion.
From a geopolitical standpoint, India’s stake in its relationship with Moscow is far less significant than China’s. For New Delhi, economic considerations will take precedence. While losing the Russian oil market would be painful, it wouldn’t be catastrophic—India managed without it entirely before 2022. But restrictions on selling goods and services to the United States would strike a much harsher blow to the Indian economy.
Unlike China, under the threat of Trump’s tariffs, India would likely move quickly to rethink its support for the Kremlin’s regime. It’s unfortunate that Washington didn’t apply pressure on its Asian partner sooner; the Biden administration had ample opportunity to do so.
Finally, there’s Turkey—the largest importer of Russian oil products, a NATO member, and a strategic partner of Ukraine. Since the full-scale war began, Ankara has maintained a complex and ambiguous position. On one hand, Turkey has consistently expressed diplomatic support for Ukraine, opposed Russia’s annexation of Crimea, and facilitated maritime shipments from Ukrainian ports. On the other, it has stayed out of the sanctions regime, continued active trade with Moscow, and acted as a key intermediary helping Russia circumvent those sanctions.
Until recently, the US and Europe approached the Turkish issue with great caution, refraining from taking retaliatory measures over Ankara’s cooperation with the Kremlin. However, much like with India, the West holds significant trade leverage.
Russia accounts for 3.3% of Turkey’s exports, while the US, Germany, Italy, France, and Spain together make up more than 32%. American tariffs, if joined by Europeans, would deal a serious blow to Turkey.
However, like China and unlike India, Ankara has clear and pronounced geopolitical interests. Think back to Trump’s first term — the US slammed sanctions on Turkey over an American pastor they were holding. Erdogan and his team showed no intention of making concessions, even amid economic difficulties, including a record plunge in the Turkish lira’s value. Accordingly, it’s unlikely that Ankara will quickly abandon trade with the Russians, even if faced with 100% tariffs from the US.
Time to make bold moves
In the end, it boils down to one key question: how much do Russia’s trading partners fear the U.S., and how unwilling are they to lose access to the American market? Given the tariff threats issued last spring and the initial 50-day deadline handed to Putin—which was later shortened—it’s clear that Trump doesn’t actually want to see these tariffs fully enforced. Meanwhile, the Kremlin has made it abundantly clear that it has no interest in negotiating or making concessions. Now the spotlight is on Russia’s partners: will they cave under Washington’s pressure?
Despite the potential fallout for the global economy and the likelihood of rising oil prices, many Ukrainians—ordinary people, officials, and observers alike—are eager for Trump to follow through on his threats to cut Russia off from its export markets. While the chances of this happening remain slim, if it does, it would almost certainly be more effective than any sanctions previously imposed on Moscow. For those witnessing the war firsthand, any move that weakens Russia’s economy is seen as a crucial step toward bringing the conflict to an end.
