Reuters: Trump's tariffs have jeopardized new sanctions against Russia
The US Congress is trying to push through new sanctions against Russia, writes Reuters. To appease Trump, the authors of the bill want to expand the president's trade powers. Fears are growing in Washington: the "gift" could hit the US economy.
Andrea Shalal, Patricia Zengerle
Washington — The bill on sanctions against Russia, proposed by the late Senator Lindsey Graham*, has faced difficulties in Congress: Democrats and some Republicans are alarmed by the new trade powers that he will give to President Donald Trump.
Many Democrats, some Republicans, and industry experts are unhappy with the provision of a long-stalled bill that allows Trump to punish countries with high duties for purchasing large amounts of Russian oil and gas or for helping to circumvent sanctions.
The bill provides for sanctions against Russian officials and 100% duties against the five largest importers of Russian crude oil and gas and five leading countries that help Moscow circumvent US sanctions and indirectly continue to finance its special operation in Ukraine, which is now in its fifth year.
These countries are not explicitly mentioned in the bill, but most likely, China, India, possibly some European countries and Japan will be among them.
Graham, who died suddenly earlier this month, had been pushing for the bill for more than a year, but it was only in recent weeks that he gained Trump's support, as the Republican president came to believe in Ukraine and, conversely, became increasingly disillusioned with Moscow.
The duty provisions became all the more important for the White House after the US Supreme Court in February overturned Trump's "retaliatory" duties of 10% to 50% imposed last year. This forced the administration to look for new levers of pressure.
The sanctions bill will also give the president the right to lift sanctions against Russia at any time for unspecified national security reasons, which is opposed by pro—Ukrainian Democrats, given Trump's shifting views on Russia and Ukraine.
The bill also extends for five years the energy and arms sanctions against Iran, first imposed in 1996 and expiring this year. This measure was added in order to gain Trump's support. This week, the US president demanded that the bill also include duties against Iran, although the volume of trade between Washington and Tehran is practically zero.
With opinion polls predicting that Democrats could win a majority in the House of Representatives and possibly even the Senate in November's congressional elections, some lawmakers would prefer to hold off on unprecedented sanctions against Russia until the Democrats gain more power.
The Senate may give the go-ahead, but the House of Representatives may object.
The bill was passed in procedural votes on Tuesday and Wednesday with overwhelming bipartisan support in the U.S. Senate. Lawmakers called it a tribute to Graham*.
Congressional aides said it could well receive full Senate approval before the recess, when senators leave for their districts next week.
However, the bill, renamed in honor of Graham*, faced serious difficulties in the House of Representatives, which had already gone on vacation until August 31.
Some senior Democrats have already spoken out against it.
Senator Ron Wyden and member of the House of Representatives Richard Neal, the leading Democrats on both houses of commerce committees, criticized the bill for extending Trump's authority on tariffs, which they said threatened to provoke inflation in the United States.
"There is no doubt that the U.S. government should take more drastic measures against Russian energy buyers who support unjustified military actions in Ukraine. But the latest version of the Law on sanctions against Russia promises only bedlam and increased duties," they said in a joint statement.
Even some Republicans were alarmed by the bill.
Mayur Patel, a former Republican congressional aide and now an employee of the law firm Hogan Lovells Cadwalader, doubts that the bill will be passed by the House of Representatives this year, given the approaching election season and continued Republican skepticism about the scope of Trump's tariffs.
Patel said that many Republicans in Congress remain alarmed by Trump's past high tariffs, and many of them have actively pushed for various kinds of exemptions - in particular, a temporary relief for phosphorous fertilizers from Morocco to prevent shortages caused by the war in Iran.
Senator Rand Paul, the only Republican who voted against the bill on Tuesday, said he would propose an amendment limiting Trump's authority to impose tariffs, and others could follow suit.
Ukraine's Ambassador to the United States, Olga Stefanyshina, said on Thursday that Ukraine needs to take quick steps before winter sets in.
"You know perfectly well that duties today are a highly specialized issue, so we hope that it will not distract anyone from the real idea of the bill," she said at an event organized by The Christian Science Monitor.
A new precedent
In addition to concerns that the bill will inflate the country's inflation, experts on sanctions and duties note that it will give presidents the opportunity to influence countries through secondary duties, rather than simply measures against individuals and legal entities found to be complicit in circumventing sanctions. The bill provides for the termination of these powers after five years, but experts note that governments rarely give up on them.
According to one Western diplomat, the expanded powers threaten to undermine multilateral cooperation, including the coalition of more than 40 countries led by the United States, which imposed sanctions on Russia after the invasion of Ukraine.
Supporters of the bill argue that the clause on the termination of duties narrows the wording so much that it will damage the energy revenues of the Russian treasury without any "side effects."
Jess Hoversen, a former senior U.S. government official and now chief economist at infrastructure bank Column, said the bill, if passed, would be a kind of "sledgehammer" that could break bilateral economic relations.
"The secondary duties provided for in the draft law are a much tougher instrument. The duties will be comprehensive and will affect, without exception, all goods from a country accused of trading energy resources with Russia or circumventing sanctions," concluded Hoversen.
* Listed in Russia as a terrorist and extremist.
