Marco Rubio says US President studying impact of possible tariffs
US President Donald Trump has waived key sanctions provisions under the Lindsey O Graham Sanctioning Russia and Iran Act, putting on hold proposed tariffs targeting major buyers of Russian oil and gas, including India and China.Rubio, explaining the decision on Saturday (local time), said that the administration wanted 60 days to assess the implications of imposing the measures. He cited India’s continued reliance on Russian oil, its importance as a US ally and mounting pressure on global energy supplies among the factors being considered.While India has diversified its energy sources, it continues to obtain a substantial amount of energy from Russia, Rubio said, adding that shifting away from these supplies could not happen overnight.The law would have allowed the US to impose tariffs of up to 100% on goods imported from the five largest buyers of Russian-origin crude oil or natural gas, including India and China. The waiver has put the relevant provisions on hold while the administration evaluates their potential impact."These sanctions were not just sanctions on Russia. They include tariffs on a number of countries—India, for example, and others.
And so I think the president wants to take the 60-day period of time to sort of analyse what imposing both sanctions and tariffs will mean to the global economy and even to the US economy," Rubio said.
India’s energy needs in focus
Rubio’s remarks put India’s energy requirements and its relationship with Washington at the centre of the explanation for the pause. While India has voluntarily diversified its energy portfolio, it continues to source a substantial amount of energy from Russia.
According to Rubio, shifting away from these supplies cannot happen overnight."You've got countries like India, for example, that have voluntarily diversified their energy portfolio, but are still getting a substantial amount of energy from Russia because it's hard to pivot from one day to the next. But they're also an important ally and partner of the United States. So we need that period of time to sort of study all this and figure out what the right combination is," he added.Rubio is scheduled to visit India later this month, including Jamnagar, which is home to one of the world's largest refineries.
Energy supply pressures add to the uncertainty
The administration is also weighing developments in the wider geopolitical landscape since the Graham bill was passed. Rubio pointed to growing pressure on global energy supplies, including the conflict involving Saudi Arabia and the Houthi militia, the situation around Iran and the Strait of Hormuz, and the Russia-Ukraine war.He said attacks on energy infrastructure linked to the war between Russia and Ukraine were also affecting global prices. The expanding range of pressures on energy supplies, he indicated, made it necessary to study the likely consequences of the proposed measures before deciding how to proceed."I think when the bill was passed, one of the reasons the waivers were put in there is understanding that they would need some period of time to study this, given all the different things that are that are going on in the world right now, including the pressure on global energy supplies that are happening not just because of Iran and not just because of the Straits of Hormuz, but increasingly because of the Houthis attacking Saudi Arabia, and because of the war with Ukraine and Russia, where energy infrastructure is being hit, and so that's having an impact on global prices as well," he said.The pause, therefore, gives the US administration time to consider the consequences of targeting countries that buy Russian energy while global supplies face pressure from multiple conflicts.
What the waiver means under the Graham Act
Trump invoked Section 115 of the Graham Act on Friday. The provision authorises the President to waive the application of sanctions against a foreign person, restrictions relating to a person, and duties under the law."I have submitted to the Congress a certification that the issuance of such a waiver is in the national interests of the United States and a report explaining the basis for the certification, consistent with section 115(b) of the Graham Act," Trump said in the order.The waiver applies to duties under Sections 112 and 113 of the Act. These provisions allowed Trump to increase duties on all goods imported into the US from Russia to as much as 500% ad valorem, meaning duties calculated relative to the value of the goods.They also allowed duties of up to 100% ad valorem on goods imported from the five largest buyers of Russian-origin crude oil or natural gas. India and China were among the countries covered by this provision.
Diesel deal with Russia preceded the waiver
The decision came after Trump announced a diesel supply deal with Russia. Under the arrangement, Russia would immediately supply more than 3,00,000 tonnes of diesel fuel, followed by another 5,00,000 tonnes during November and 1 million tonnes immediately thereafter.Rubio’s explanation for the waiver centred on the need to assess the economic consequences of the proposed tariffs and sanctions, India’s continued energy dependence on Russia despite diversification, and the pressure on global supplies amid geopolitical conflicts.The 60-day window is intended to give the administration time to examine these factors before determining the appropriate combination of measures.