Trump Signs Russia Iran Sanctions Law Leaving No Scope
for Judicial Intervention
US president gives backing to ‘Lindsey Graham
Sanctioning Russia and Iran Act of 2026’ before next week’s Xi-Trump summit in Washington
Key
Points
1.
Trump signs new sanctions law
o
President Donald Trump signed the “Lindsey O.
Graham Sanctioning Russia and Iran Act of 2026” into law on 18 August
2026.
o
The law authorises expanded statutory sanctions,
tariffs and prohibitions against Russia, while extending existing sanctions
on Iran.
2.
Up to 100% tariffs on Russian-energy buyers
o
The legislation gives the President authority to
impose tariffs of up to 100% on the five largest buyers of Russian
oil and natural gas.
o
China and India are expected to be among the
countries potentially affected, although they are not explicitly named
in the legislation.
3.
Additional Russia measures
o
Tightens restrictions on Russia's:
§ Energy
industry
§ Defence
sector
§ Tanker
fleet allegedly used to evade sanctions.
o
Introduces additional measures against Iran.
4.
Countries potentially exempt
o
Japan, France, Hungary and Belgium could
potentially qualify for exemptions because they purchase smaller quantities of
Russian energy and are taking steps to reduce dependence on Russia.
5.
China objects
o
China criticised the legislation, saying its
economic and trade cooperation is based on equality and mutual benefit.
o
Beijing opposed what it described as “long-arm
jurisdiction” lacking a basis in international law or UN Security Council
authorisation.
6.
Timing ahead of Xi's Washington visit
o
The legislation was signed only days before Chinese
President Xi Jinping's planned state visit to Washington.
o
US Treasury Secretary Scott Bessent and
Chinese Vice-Premier He Lifeng are scheduled to hold preparatory
discussions on economic deliverables.
7.
US-China trade negotiations
o
The two sides are reportedly considering:
§ Lower US
tariffs on agricultural goods.
§ Extension
of the existing US-China trade truce.
o
The new Russia-energy sanctions could therefore add
another issue to the bilateral negotiations.
8.
Potential pressure on Chinese banks
o
Washington is also pressing China to sever
commercial ties with Iran under its “Operation Economic Outcast”
sanctions campaign.
o
Bessent indicated that Washington was discussing
the issue with Beijing, including possible action concerning Chinese banks
linked to Iranian entities.
9.
India's position
o
India warned that the new law has “potential
implications” for the US-India relationship.
o
The Ministry of External Affairs reiterated India's
commitment to energy security for its 1.4 billion people.
o
India said it would continue diversified energy
sourcing based on evolving market dynamics.
10.
Earlier US action against India
o
The US had previously imposed a 50% tariff on
India over its purchases of Russian oil.
o
According to the report, that tariff was lifted
in February 2026.
o
China had not faced equivalent action over its
Russian oil purchases.
11.
US domestic criticism
o
Several House Democrats opposed the legislation,
arguing that it gives the President broad new tariff authority.
o
Representative Gregory Meeks argued that the
language could allow tariffs to be imposed on a wide range of countries under
the justification of sanctions evasion.
12.
Broader global trade impact
o
The expanding US use of tariffs and sanctions
is encouraging affected countries to explore alternatives to the US-led
financial system.
o
The report links this development to the recent BRICS
decision to deepen trade and expand the use of local currencies for
cross-border payments.
13.
BRICS relevance
o
BRICS includes China, India, Russia and Iran,
alongside other members.
o
Greater use of local currencies could reduce
dependence on the US dollar for intra-BRICS trade.
Effect /
Trade Implication
·
The new law creates a potential additional
tariff risk of up to 100% for major purchasers of Russian oil and gas.
·
For India and China, the immediate impact
depends on how the Trump Administration exercises the new authority and whether
exemptions or other arrangements are provided.
·
The measure potentially adds a significant energy-security
and US trade-policy dimension to India-US and US-China relations.
US
President Donald Trump on Friday (18.08.2026) signed a new sanctions bill into law
that targets Russia’s leading energy buyers – China and India – just days before
Chinese President Xi Jinping arrives in Washington for a state visit.
The
White House issued a brief statement, saying that the President had “signed into
law” the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” which “authorises
and expands statutory sanctions, tariffs, and prohibitions on Russia and extends
existing sanctions on Iran.”
The
US House of Representatives passed the bill by a comfortable 262-159 vote on Wednesday.
The Senate cleared the bill last month by an overwhelming 86-11 vote.
The
legislation, originally backed by the late Republican Senator Lindsey Graham, who
died in July, gives Trump the authority to impose tariffs of up to 100 per cent
on the five biggest buyers of Russian oil and natural gas, adding another layer
to his tariff-driven approach to foreign policy.
The
bill would also tighten restrictions on Russia’s energy and defence industries,
target its tanker fleet used to evade existing sanctions, and introduce further
measures against Iran.
The
bill does not explicitly name the countries that could face tariffs, but its provisions
are expected to affect major importers such as China and India.
Countries
including Japan, France, Hungary and Belgium could potentially be exempt as they
source smaller volumes from Russia and are taking steps to reduce their dependence.
China
on Thursday criticised the move, saying that Beijing “carries out economic and trade
cooperation with countries on the basis of equality and mutual benefit”.
“China
opposes long-arm jurisdiction that has no basis in international law or the authorisation
of the UN Security Council,” Chinese foreign ministry spokesman Guo Jiakun said.
The
developments come just days before US Treasury Secretary Scott Bessent and Chinese
Vice-Premier He Lifeng are due to hold their final preparatory talks ahead of the
Chinese leader’s visit next week.
The
two sides are expected to settle the summit’s potential economic deliverables, including
lower tariffs on agricultural goods, while seeking to extend the fragile trade truce
agreed in October last year, the South China Morning Post reported earlier.
The
bill targeting Russian oil exports to Beijing and other major buyers adds another
point of potential friction as Washington presses China to sever commercial ties
with Iran under its “Operation Economic Outcast” sanctions campaign.
“With
China, we have had some very good private discussions, and I look forward to those
continuing this weekend when I meet my Chinese counterpart, [Vice-Premier] He Lifeng,”
Bessent said during a House Financial Services Committee hearing on Tuesday when
asked whether Washington planned to target Chinese banks over their alleged links
to Iranian entities.
However,
Washington is unlikely to target Beijing given the fragile trade understanding between
the two countries and its previous decision to penalise only India over Russian
oil purchases while leaving China’s imports untouched.
Last
year, Washington hit New Delhi with a 50 per cent tariff over its purchases of Russian
oil, which it lifted in February.
India
also warned on Thursday that the new law carries “potential implications” for the
US-India relationship.
“India
remains firmly committed to ensuring energy security for its 1.4 billion people.”
India’s Ministry of External Affairs said in a statement.
“It
will continue to do so through diversified sourcing and on the basis of evolving
market dynamics,” the statement added.
During
his second term, Trump has pushed the limits of his executive authority and wielded
tariffs aggressively to pursue political and economic goals, from pressuring trading
partners to change their policies to advancing US economic interests.
Most
recently, he imposed new tariffs on goods from Canada and Brazil, further expanding
the list of trading partners facing higher US duties.
Many
House Democrats voted against the Russia sanctions bill, arguing that it would give
Trump “sweeping new tariff authorities that he can abuse to raise costs on the American
people”.
“With
this language, he would be able to place tariffs on nearly any country he wants,
using sanctions evasion as a pretext,” said Gregory Meeks, a Democratic representative
from New York and ranking member of the House Foreign Affairs Committee.
“Does
anyone seriously believe President Trump will not use this broad language to target
whichever government he is personally angry at?”
Washington’s
expanding use of tariffs and sanctions is also pushing targeted countries to explore
alternatives and reduce their reliance on the US-led global financial system.
Last
week, Brics leaders agreed to deepen trade and expand the use of local currencies
for cross-border payments, advancing the bloc’s efforts to reduce reliance on the
US dollar.
Brics
comprises 11 countries, including China, India, Russia and Iran.