The legislation builds on previous US sanctions against Russia, which have included asset freezes and export controls. However, targeting the buyers of Russian energy represents a more aggressive approach, as it directly pressures Russia's largest source of revenue. The bill's success hinges on cooperation from key allies and the ability of the Trump administration to enforce the tariffs without sparking a global energy crisis.
Since the invasion began, the US and its allies have imposed numerous sanctions targeting Russia's financial system, technology imports, and energy sector. Yet this bill takes a novel approach by directly penalizing the countries that continue to buy Russian energy, rather than imposing direct restrictions on Russia itself. The strategy aims to tighten the financial noose on Moscow while avoiding a global supply shock, given that China and India have become the world's largest importers of Russian crude.
The legislation contains an exemption for nations that buy under 15% of Russia's gas. A Senate aide noted this exemption spares allies such as France and Japan, which are large buyers of Russian crude. Additionally, the bill grants Trump fresh power to levy 100% tariffs on the five nations most involved in evading Russian oil sanctions. Further measures focus on Russia's shadow fleet and Beijing's backing of Moscow's defense industry.
According to a Senate aide, the bill resulted from high-level talks involving Treasury Secretary Scott Bessent, Graham, and Democratic Senator Jeanne Shaheen.
Get the market news that matters in a five-minute read with Market Briefs, our free daily newsletter
"This is in honor of Lindsey. This was his thing. He wanted this more than any other thing," Trump said to journalists at the White House on Tuesday.
On Tuesday, Louisiana Republican Senator John Kennedy told reporters at the Capitol building that he had recently finished a call with Trump, during which they discussed a "serious effort" by lawmakers to move the bill forward. "I don't speak for him, but I think he's ok with the deal," Kennedy said.
Russia's invasion of Ukraine has dragged on for four years. Graham and other foreign-policy hardliners have spent the last year promoting different iterations of this sanctions bill to cut off Russia's primary revenue stream, but previously lacked White House support. Last week, Graham and co-sponsors finally secured a deal with the administration on the bill.
The bill's backers argue that Russia's ability to fund its war effort depends heavily on oil and gas exports, which account for a significant portion of its budget. By targeting major buyers like China and India, the US aims to reduce Moscow's income without directly sanctioning those nations. The exemption for allies ensures that the burden falls primarily on non-aligned countries that have increased their Russian energy imports since the invasion began.
The ongoing conflict has devastated Ukraine's infrastructure and economy, with the World Bank estimating reconstruction costs in the hundreds of billions. Previous US-led sanctions have already frozen hundreds of billions in Russian central bank assets and restricted technology exports, yet Moscow has continued to fund its war effort through energy sales to non-Western nations. This new bill represents a more direct attempt to choke that revenue stream by pressuring the buyers themselves.
A Senate aide said the bill's backers believe it will pass the Senate now that President Trump has endorsed it. However, when the legislation might reach a floor vote remains uncertain.
In September, President Trump is set to host Chinese President Xi Jinping in Washington for talks, with China's supply of critical minerals to the US expected to be a major topic. Beijing has often wielded those minerals as bargaining chips in trade negotiations with the Trump administration.
Join Market Briefs, our free daily newsletter, for a quick daily rundown of the markets
