Trump's secondary sanctions against Russia damage the US economy

Trump's secondary sanctions against Russia damage the US economy

This week the deadline set by US President Donald Trump is running out to move Russia to peace in Ukraine. His plan provides to occupy countries that continue to receive oil from Moscow with new tariffs.

New pressure on international trading partners

Trump's special sent in Steve Witkoff will travel to Russia on Wednesday before the deadline will run later this week. However, if peace in Ukraine continues to appear a long way off and Trump implements its plan, the new pressure could seriously burden the American economy.

economic effects on the USA

Analysts warn that the new tariffs not only increase the import of Russian oil the prices for consumer products in the USA, but also reduce the profit margins of American companies and may lead to higher oil prices. "The punishment for countries that continue to receive large amounts of Russian energy would also significantly damage the US economy," said Clayton Seigle, Senior Fellow for Energy and Geopolitics at the Center for Strategic and International Studies.

planned tariffs and their consequences

Last month Trump announced that a customs of 100% to collect his Russian colleague Vladimir Putin does not close peace with Ukraine within 50 days. Trump has now moved this deadline for this week.

The role of China and India

The tariffs would mainly be aimed at imports from India and China, which are both large buyers of Russian oil and are among the largest trading partners in the United States. Last year, the United States imported a total of $ 526 billion from these two countries. Both Asian states have greatly increased their crude oil purchases from Russia after the full attack of Moscow to Ukraine in 2022, which reduces the prices for Russian oil because western countries greatly reduced their imports.

Current Russian oil exports make up 36% of the Indian market. This has apparently led to India has become a goal of Trump's anger; On Tuesday, he promised to increase the tariffs to the country "very significantly" within the next 24 hours due to its appetits on Russian oil.

price increase through additional tariffs

Additional tariffs, especially Chinese goods that are already 30%, would probably increase the prices for consumer products in the USA, such as iPhones. Giovanni Staunovo, raw material analyst at UBS WEATTH Management, noted that "US consumers would be angry about it". This could cause Trump to take these measures back soon after their introduction.

global oil prices and their importance

The introduction of secondary tariffs to Russian oil imports would also reduce the flow of Russian oil into the global markets, where prices are determined. "Russia is too big to fail," Staunovo argued. "Russia exports 7 million barrels per day of crude oil and refined products. These quantities cannot be easily replaced."

Global oil prices are also important for the United States, which, despite its large oil production, still import a lot of crude oil. The West Texas Intermediate, the reference price for US oil, was traded at over $ 65 per barrel on Tuesday morning.

considerations on tariff strategies

If Trump introduces the secondary tariffs, they may not be as high as he has threatened with it. Seigle believes that lower customs sets between 10% and 30% would "have more weight" and the countries would encourage them to diversify their oil deliveries. "Draconian customs duties are simply perceived as bluff because they not only harm the other, but also the USA," he said.

The reporting on this topic was supported by Kevin Liptak, Simone McCarthy, Anna Chernova, Lauren Kent and Kit Maher.