October 1, Kathmandu – US President Donald Trump has been given the authority to impose tariffs of up to 100 percent on selected countries. This directive comes from a bill recently passed by the US Congress. On Wednesday, the House of Representatives approved legislation to impose tariffs of up to 100 percent on five countries that import substantial amounts of oil from Russia. The bill passed with 262 votes in favor and 159 against. The Senate had already approved this bill in August with an 86-11 vote. Once President Trump signs it, the bill will become law. Officially, it is named the “Lindsey O. Graham – Sangsning Russia and Iran Act of 2026.”
The list of countries importing significant amounts of crude oil from Russia includes China, India, Slovakia, Hungary, and Azerbaijan. US trade representatives are mandated to review this list every 180 days. India, a country from which Nepal imports oil, currently purchases more than 40 percent of its crude oil requirements from Russia. India’s Ministry of Foreign Affairs has clarified that it will ensure that the US’s decision to impose 100 percent tariffs does not adversely affect the country’s interests. Over the past two years, since the Russia-Ukraine war began, India has intensively increased purchases of Russian crude oil due to competitive pricing.
In 2022-23, Russia became India’s largest oil supplier. Before the conflict, India bought relatively modest quantities of Russian oil; however, post-war imports surged to between 1.6 and 2 million barrels daily. Currently, India imports over 40 percent of its crude oil requirements from Russia, placing it among the world’s largest buyers of Russian oil. If the bill becomes law and the US imposes 100 percent tariffs on oil purchased from Russia, Indian exports to the US could be directly impacted since these tariffs would increase the cost of Indian products in the American market. However, the impact on Nepal is expected to be minimal.
Should India shift away from Russian oil and turn to alternative suppliers, various outcomes are possible. An increase in tariffs or sanctions on Russian oil would likely compel India to buy more expensive oil, potentially raising petrol and diesel prices in India, with possible spillover effects on Nepal’s market. The bill also imposes stringent sanctions on Russia’s defense sector and its so-called ‘shadow fleet,’ targeting businesses involved in Russian oil and defense industries. The US government has previously attempted similar sanctions on Russia.
However, due to disrupted oil supplies during the Iran war when the Strait of Hormuz was closed, leading to global oil shortages, some exemptions may be necessary. This bill extends the 1996 “Iran Sanctions Act” until 2031, which penalizes non-US companies trading with Iran. It also grants the US president authority to impose tariffs of up to 500 percent on Russian goods entering the US, applicable for five years. European countries will receive exemptions; the bill also covers China, France, Japan, Hungary, and Belgium, all of whom purchase Russian natural gas. Countries importing less than 15 percent of Russian gas and steadily reducing dependence will be exempted.
The Senate bill provides exemptions to 15 European nations from the proposed 100 percent tariff, provided they import less than 15 percent of Russian gas and are progressively decreasing their reliance. Democratic Senator Richard Blumenthal stated that the bill is not aimed against European allies but targets countries that continue to provide significant economic support to Russia’s oil trade. The bill proposes sanctions on Russia’s energy sector, financial institutions, defense industry infrastructure, merchants, and President Vladimir Putin.
