Asia on Edge as Trump Backs Punitive Tariffs Over Russian Oil

By Sadik Sagar, Dhaka, January 12, 2026

United States President Donald Trump has backed a bipartisan bill that would impose sweeping sanctions on countries continuing to buy Russian oil, a move that could significantly disrupt Asian economies and global trade flows. The proposed legislation, championed by Republican Senator Lindsey Graham and Democrat Richard Blumenthal, would give Trump the authority to impose tariffs of up to 500 percent on imports from countries engaged with Russia’s energy sector.

Senator Graham said Trump had “greenlit” the bill following a “very productive” meeting, calling it a powerful tool to pressure nations such as China, India and Brazil to halt purchases of discounted Russian crude. According to Graham, the revenue from such oil sales continues to finance Russia’s war effort in Ukraine.

China and India remain Russia’s largest energy customers despite Western sanctions. Data from the Centre for Research on Energy and Clean Air shows China accounted for nearly half of Russia’s crude oil exports in November, while India imported about 38 percent. Brazil, though previously a major buyer after the 2022 invasion of Ukraine, has reduced imports in recent months.

The announcement has already rattled Asian financial markets, particularly in India. Shares of Indian export-oriented companies fell sharply on Thursday amid fears that a 500 percent tariff would effectively shut Indian goods out of the US market. The concern is most acute in the textile and garment sector, which relies heavily on US demand.

India’s textile and apparel industry, which exported $37 billion worth of goods in the 2024–25 fiscal year, warned that the proposed tariff—on top of an existing 50 percent US duty imposed last year—would act as a de facto embargo. The US accounts for nearly 30 percent of India’s garment exports, making it India’s largest overseas market.

Tiruppur, Tamil Nadu, India’s largest knitwear hub, has emerged as a focal point of anxiety. Industry leaders say overseas buyers are already reconsidering sourcing plans amid growing uncertainty.

Ajay Srivastava of the Global Trade Research Initiative cautioned that such punitive tariffs, combined with possible restrictions on services, could cripple India’s $120 billion annual exports to the US.

The ripple effects extend beyond India. Asian markets dependent on stable energy prices and export access to the US are closely watching developments. Analysts warn that tariffs used as sanctions could distort supply chains, weaken regional currencies, and increase volatility across Asian equity markets.

Talking to Al Jazeer, Former US Treasury official Catherine Wolfram described tariff-based sanctions as an “untested tool,” warning that countries like India and China may continue buying Russian oil if Washington hesitates to enforce such extreme measures—especially amid sensitive trade negotiations.

The proposal comes as Washington pushes for a diplomatic settlement to the Ukraine war, backing European-led security guarantees for Kyiv. Whether Trump ultimately enforces the sanctions remains uncertain, but the threat alone has already sent shockwaves through Asia’s markets and export-driven economies.