The U.S. Treasury is urging its G7 and European Union allies to impose “meaningful tariffs” on goods imported from China and India in response to their ongoing purchases of Russian oil, which Washington says directly funds Moscow’s war effort in Ukraine. In a recent G7 finance ministers’ call, Canada—holding the rotating presidency—pushed for measures including frozen Russian sovereign assets to be redirected toward Ukraine’s defense, along with trade penalties for countries seen as “enabling” the Russian economy. Already, the U.S. has raised tariffs on Indian imports to 50%, combining a base tariff and penalties linked to India’s oil purchases from Russia. While China has not yet been similarly hit with new penalties, Washington is signalling that further action could follow if Beijing does not reduce its Russian oil imports.
Economists warn that such tariffs may deepen trade tensions and disrupt global supply chains, especially as India and China are major manufacturing hubs for many consumer goods consumed in Europe and North America. There is concern also over possible retaliation—China has the economic heft to respond, and European countries are wary of harming their trade relationships. Meanwhile, the U.S. argues these sanctions are temporary and will be rescinded once Russia ends its war in Ukraine, framing tariffs as tools of diplomacy rather than permanent economic warfare.
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