President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 into law on September 18, arming himself with authority to impose tariffs of up to 100 percent on the five largest buyers of Russian oil and natural gas. China and India, which together absorb roughly 85 percent of Russia’s seaborne crude exports, are the law’s primary targets.
The signing comes days before Xi Jinping’s state visit to Washington, scheduled for September 23–24. The timing converts a sanctions statute into immediate diplomatic leverage, with the White House now holding a tariff weapon it can aim at Beijing’s energy imports before the two presidents sit down.
Washington has tightened sanctions on Moscow at regular intervals since 2022. Each round followed a familiar rhythm: new designations, new prohibitions, a joint statement with allies. The law signed on Friday breaks that pattern. It does not merely sanction Russia. It authorises the president to penalise the countries that keep Russia’s energy sector solvent — and it does so with Xi Jinping already en route to Washington.
The legislation, named for the late Senator Lindsey Graham, gives Trump the power to impose tariffs of up to 100 percent on goods from any country that ranks among the top five importers of Russian crude or natural gas and continues buying after a 30-day grace period. China and India are named in the text. Both qualify by volume. Both now face a choice that did not exist a week ago: reduce purchases or risk a tariff wall on exports to the American market.
The timing is not incidental. Xi is scheduled to arrive around September 23 for bilateral talks and a White House state dinner. The agenda already included trade truce extensions and AI governance rules. It now includes a question Beijing had not expected to answer so directly: how much Russian energy it is willing to forgo to keep American markets open.
The arithmetic that put Beijing and New Delhi in the crosshairs
The law’s secondary tariff mechanism is precise. Within 30 days of enactment, the president must raise tariffs on all Russian-origin goods — including oil and gas — to as high as 500 percent ad valorem. A separate authority permits tariffs of up to 100 percent on goods from each of the five largest importers of Russian crude or natural gas that knowingly make new purchases after the grace period. A parallel provision targets the five leading facilitators of sanctions evasion.
Data from the Centre for Research on Energy and Clean Air shows why China and India are the law’s unavoidable subjects. In early to mid-2026, China was buying roughly 48 to 51 percent of Russia’s crude oil exports. India accounted for another 36 to 38 percent. Together they represent the revenue stream the legislation is designed to choke.
The bill passed the House 262 to 159 on Wednesday and cleared the Senate 86 to 11 last month. Its chief sponsor, Lindsey Graham, who died in July, had framed it as a way to use Trump’s preference for tariffs to constrain Russia’s war financing. Daniel Balson, director of advocacy at Razom for Ukraine, said the sanctions and tariff tools “will strike at the heart of his war machine, weaken his economy.”
Senior analysts at the Center for Strategic and International Studies describe the secondary tariff authority as the bill’s most consequential innovation — a narrower instrument than earlier blanket tariff proposals, with carve-outs that give the administration room to calibrate. Atlantic Council trade and security experts assess that the act would allow Washington to justify tariffs on selected Chinese imports on national security grounds if Beijing maintains large-scale Russian oil purchases.
Guo Jiakun, spokesperson for China’s Ministry of Foreign Affairs, stated that China views the law as illegitimate long‑arm jurisdiction and that Beijing’s energy trade with Russia should not be constrained by Washington’s coercive measures. The statement was firm. It did not, however, rule out adjustments.
For a crude trader in Shandong, the new law is not a geopolitical abstraction. It is a question of whether a cargo of Russian Urals booked for October delivery will still be viable if Washington moves quickly. The 30-day grace period means the window for uninterrupted purchases is already narrowing.
A sanctions architecture that now reaches past Moscow
The law amends existing US sanctions statutes and trade law to compel the president to raise tariffs on Russian-origin goods. It authorises but does not mandate secondary tariffs on third countries. The White House leads designation decisions, drawing on data from Treasury, Commerce, and intelligence agencies to determine the top five buyers and facilitators. The political cost of imposing tariffs on strategic partners is the real constraint — and the reason the law includes statutory exemptions and presidential waiver authority.
Countries whose imports account for less than 15 percent of Russia’s total natural gas exports and that take significant steps to reduce those volumes are exempt. The president can also waive sanctions or tariffs for any country by certifying to Congress that doing so is in the US national interest. These escape hatches are not loopholes. They are the negotiating space the administration built into the law — and the reason the timing with Xi’s visit matters so much.
Initial Western government reactions have focused more on Ukraine support than on tariff mechanics. EU and UK officials have reiterated existing embargoes and price caps, signalling they see the US law as complementary but have not announced matching secondary tariffs. Australia has maintained its current stance while monitoring any impact on allies like Japan that still rely on limited Russian gas supplies.
Beyond China and India, Asian importers such as Turkey, Japan, and South Korea face sharper scrutiny of Russian energy purchases and maritime services. The 15 percent gas-import exemption is designed to shield some allies if they demonstrably cut volumes, incentivising accelerated diversification to LNG from other suppliers. Southeast Asian refiners and trading hubs may also rethink ship financing and insurance links to Russian crude to avoid being tagged among the top sanctions-evasion facilitators.
The law transforms sanctions rhetoric into a concrete tariff tool. By signing it days before Xi’s arrival, Trump has ensured that the first test of that tool will be diplomatic, not commercial. The question now is whether the authority is a cudgel or a bargaining chip — and whether Beijing reads the difference in time.
Beyond the headline
The Timing
The bill’s signing just days before Xi’s arrival compresses two normally separate tracks — Ukraine-related sanctions design and US–China summit choreography — into a single negotiation window. That timing forces Beijing to weigh concessions or defiance on Russian energy while trade truce extensions and AI rules are on the table, turning what might have been a routine pageantry visit into a test of how far Trump will weaponise tariffs in real time.
The Power Behind It
On paper the authority sits with the president, but the real power lies in the US data and enforcement machinery that will determine which countries qualify as top buyers or sanctions enablers. Treasury, Commerce and sanctions specialists effectively choose who is put in the crosshairs, and business lobbies and allied governments will now compete to shape those designations, making technical definitions of “top five” and “significant steps” the quiet battleground.
The Reach
One less obvious actor is Europe’s remaining gas buyers, whose import shares and diversification efforts could tip them above or below the law’s 15 percent threshold. Through that single metric, Washington’s choices on enforcing exemptions will indirectly influence how fast specific EU states move away from Russian gas, with knock-on effects for European power prices and thus for the competitiveness of Western heavy industry exposed to global trade.
A tariff deadline meets a diplomatic window
With the 30-day implementation clock already running and Xi’s visit days away, the law creates immediate decisions for investors, supply-chain managers, energy traders, and families with exposure to China.
- US-based investor with APAC emerging market exposure
You need to assess the potential for increased volatility in Chinese and Indian markets. Review current US Treasury sanctions guidance at home.treasury.gov to understand how secondary tariffs and designations may affect existing business or financial exposures. Re-evaluate the risk profile of your portfolio and consider hedging strategies against potential tariff-induced economic slowdowns or supply chain disruptions.
- Western semiconductor procurement manager
Monitor the implementation of these tariffs closely to anticipate potential delays, cost increases, or re-routing of supply chains. The Atlantic Council assessment that Washington could justify tariffs on selected Chinese imports on national security grounds means semiconductor supply chains are not insulated from this law. Explore diversifying your procurement strategy away from heavily impacted regions or suppliers now, before designations force faster moves.
- European energy trading firm executive
Analyse how potential US tariffs on China and India might re-route energy cargoes and impact global benchmark prices. Check the European Commission’s official sanctions and energy security pages at ec.europa.eu for any changes to EU policy triggered by the US law. Adjust your forward contracts and hedging positions to account for new arbitrage opportunities or risks as Asian buyers potentially reduce Russian crude imports.
- Western parent of a university student in China
Escalating trade tensions and potential economic instability in China could impact your child’s safety, cost of living, and overall experience abroad. Monitor the geopolitical and economic developments closely, discuss contingency plans with your child, and assess whether the current environment remains suitable for their continued study in China as the tariff situation evolves.
FAQ
How are the top five buyers determined?
The act uses a backward-looking metric: the five largest importers by total volume of Russian-origin crude oil or natural gas over the most recent 12-month period before enactment. Countries only face tariffs if they were in that top tier and then knowingly make new purchases at least 30 days after the law takes effect, so sudden reductions can eventually move importers out of the risk bracket in future measurement periods.
What are the conditions for exemptions and waivers?
Two main relief routes exist. Statutory exemptions apply to countries whose imports represent under 15 percent of Russia’s total natural gas exports and that take significant steps to cut those volumes. Separately, the president can waive sanctions or tariffs for any country if he certifies to Congress that doing so is in the US national interest, creating room for case-by-case diplomacy and negotiated deals.
What is the practical impact on contracts and shipping?
Tariffs under the act apply at the US border to covered goods, so companies with term contracts for Russian-origin fuels or products that transit through intermediary hubs must assess whether cargoes ultimately landing in the US will face new duties. Shipping, insurance and trading firms linked to Russia’s shadow fleet risk designation as sanctions evasion facilitators, prompting many Western service providers to tighten due diligence or exit these routes.
Explainer
- Lindsey O. Graham Sanctioning Russia and Iran Act of 2026
- The US law signed on September 18, 2026, that expands sanctions on Russia’s defense sector, energy industry, and shadow fleet while extending existing sanctions on Iran. It authorises the president to impose tariffs of up to 500 percent on Russian-origin goods and up to 100 percent on third countries that rank among the top five importers of Russian crude or natural gas. The act is named for the late Senator Lindsey Graham, who died in July 2026 and had championed using tariffs to constrain Russia’s war financing.
- Secondary tariffs
- Tariffs imposed not on the country directly sanctioned but on third countries that trade with it in prohibited goods. In this law, they apply to nations that continue buying Russian oil or gas after a 30-day grace period and rank among the top five importers. The mechanism turns trade partners into enforcement targets, raising the cost of doing business with Russia beyond direct sanctions.
- Shadow fleet
- A network of tankers operating outside Western regulatory and insurance frameworks to transport Russian oil in violation of sanctions. The vessels often obscure ownership, switch flags, or disable tracking systems. The new US law targets facilitators of this fleet, including insurers, financiers, and maritime service providers, with potential designation as sanctions evasion enablers subject to tariffs.
- Ad valorem
- A tariff calculated as a percentage of the value of the imported goods rather than a fixed amount per unit. The act specifies tariffs “up to 500 percent ad valorem” on Russian goods, meaning a USD 100 barrel of oil could face a USD 500 duty. This structure makes the tariff’s impact scale with commodity prices, amplifying its deterrent effect when energy markets are tight.
- Long‑arm jurisdiction
- A legal doctrine under which one country asserts authority over conduct or entities outside its borders. China’s Foreign Ministry spokesperson Guo Jiakun used the term to reject the US law, arguing that Beijing’s energy trade with Russia is a bilateral matter beyond Washington’s reach. The US counters that its sanctions authority extends to transactions that use dollars or touch the American financial system.
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