President Donald Trump recently issued an unprecedented call for economic pressure against Russia by encouraging European Union nations to follow his lead and implement punishing tariffs of up to 100 percent on imports from China and India, setting off trade warfare in response to Russia’s invasion of Ukraine, initially launched in 2022. This dramatic escalation signals a change from traditional sanctions towards active trade warfare measures against Moscow.
Trump made his case during a high-stakes conference call with EU sanctions envoy David O’Sullivan and other European officials currently present in Washington that China and India, major buyers of Russian oil, are fuelling Moscow’s war machine by propping up their economies. He noted that steep tariffs from Europe would both hit Russia directly as well as demonstrate transatlantic unity against authoritarian aggression; Trump hinted that his nation stood ready to follow suit by applying 100 percent tariffs if Europe led by example (Reuters/The Guardian/FT). He suggested the EU take lead with regard to authoritarian aggression from authoritarian aggression from authoritarian authorities while hinting at American readiness in applying similar 100 percent tariffs themselves (Reuters/The Guardian/ Financial Times).
The EU proposal marks a notable departure from their prior approach of targeting sanctions over broad trade punishment, such as wide-scale tariff regimes. Up until now, Brussels had relied on sanctions targeting Russian banks, energy, and other sectors — rather than employing broad-based tariff regimes that apply across industries. EU officials must carefully navigate between keeping cohesion between Washington and Asia while upholding vital trade relationships within Europe (Reuters/FT).
China quickly responded, issuing strong objections against what it termed coercive economic tactics and being linked with Russian aggression. Officials further condemned any linkage between China and Ukraine conflict or tariff threats and official actions; these threats being unwarranted and provocative, according to Reuters reports.
India, recently hit with a 50% U.S. tariff this summer, is once again at the center of geopolitical diplomacy. President Donald Trump’s call for EU tariffs against New Delhi only adds to already tenuous ties caused by New Delhi’s purchases of Russian crude. But, on a more conciliatory note, he later noted that U.S.-India trade negotiations remain active – promising “to speak soon with my very good friend Prime Minister Modi”, suggesting the administration was open to an increase in bilateral trade. (Reuters + The Guardian).
EU officials are currently treading carefully as they attempt to respond to this demand from Russia for sanctions and tariffs, though doing so would represent a dramatic policy shift that raises legal, economic and political concerns within their bloc. Such an act would necessitate unprecedented coordination among member states who rely heavily on energy trade with Moscow (Financial Times/Reuters).
Critics argue that punishing broad-based tariffs risks sparking a global trade war; additional concerns have been voiced regarding unintended effects such as global inflation and supply chain disruption; supporters view it as an effective means of pressuring Russia by attacking its economic lifelines.
As talks progress, the true test lies in whether the EU takes up Vladimir Putin’s bait; and whether Europe is prepared to incur some of the economic costs of confronting Vladimir Putin through trade pressure.