Washington, DC: Tariffs of up to 100% on the top five purchasers of Russian oil and gas, including India, under the proposed Sanctioning Russia and Iran Act would increase costs for everyday consumer goods, manufacturing inputs and other products, American business groups have warned senators.
Nearly two dozen influential business associations in the US have written a letter to 100 senators expressing concern about the Russia sanctions bill, which threatens up to a 100% tariff on India and four other major purchasers of Russian energy.
They asked the lawmakers to consider removing the bill’s tariff provisions, citing their potential impact on costs for consumers and businesses, as reported by Hindustan Times.
Narrowly tailored tariffs and legislative monitoring and approval mechanisms which could moderate president Donald Trump’s authority to target countries like India need to be considered, the associations have recommended.
The letter was written in late July by the National Retail Federation, the US Council for International Business, the US Chamber of Commerce and 20 other industry groups.
While the associations voiced support for efforts to pressure Russia to end the Ukraine war, they pointed out that tariffs of up to 100% on the top five purchasers of Russian oil and gas proposed under the Act would effectively tax US importers and consumers for foreign governments’ energy decisions, which are outside the control of American companies.
“Tariffs of this scale would increase costs for everyday consumer goods, manufacturing inputs and other products while creating significant uncertainty for companies making sourcing, pricing and inventory decisions months in advance. It could also lead to retaliatory tariffs against US exports, including agriculture,” the letter said.
The US Congress has been urged by the associations to focus its efforts on targeted sanctions and stronger enforcement against sanctions evasion to put pressure on the Russian economy and its war effort in Ukraine.
“If Congress chooses to retain any tariff mechanism, it should be narrowly tailored, clearly defined, subject to regular review and paired with a workable off-ramp. Congress should also include provisions regarding effective oversight of any tariff-based secondary sanctions to ensure that the Administration does not use them for unintended purposes,” they wrote.
Proposed checks include requiring the Trump administration to seek approval for tariffs on imports from US treaty allies and provide regular justification for the tariffs it imposes.
The Sanctioning Russia and Iran Act has faced political roadblocks in the US House of Representatives after it was passed by the Senate with a decisive margin.
US Senate legislation authorised Trump to impose tariffs of up to 100% on countries making significant purchases of Russian oil. The bill’s sponsors named India as one of five target economies, and the US Senate approved it by 86 votes to 11. The bill spared US allies in Europe for similar purchases of Russian oil, gas and other exports.
Trump had announced a trade deal with India in February, slashing tariffs on Indian goods to 18% from 50%.
The Democrats have raised concerns about the new tariff provisions, which they say give the Trump administration too much power to levy tariffs.
The Republicans, on the other hand, are divided and have been unable to bring the legislation to a vote in the House. A vote on the legislation is expected after the midterm elections in November, as legislators leave Washington and return to their districts to campaign.
The Trump administration has given mixed signals about the extent of their support for the Russia sanctions bill. US Ambassador to India Sergio Gor downplayed President Trump’s support for the bill in New Delhi last month. The White House had not publicly advocated for it to be passed, he said.
The passage of the bill would give the Trump administration more options on Russia, US secretary of state Marco Rubio has said while attacking the Democrats for holding up its passage in the House.