How “Trump’s Secondary Tariffs for Russia can hit the global economy

Although it is the most respected country in the world, Russia continues to use its enormous energy wealth to banish its war in Ukraine.

US President Donald Trump hopes to change that. He has announced that the meshing of new secondary tariffs It will affect any country that is still trading with Russia if the cessation of the fire with Ukraine is not agreed until Friday, August 8.

Secondary tariffs will see goods from any country in which it encounters Russia 100% tax When they are imported into the United States.

Oil and gas are the largest exports of Russia, and the largest customers in Moscow include China, India and Turkey.

“I used trade for many things, but it’s great for arranging wars,” Trump said last month.

This will not be the first time the Trump administration has imposed secondary tariffs, which are also designed to punish the buyers of Venezuelan oil.

However, their use against Russia would have much more consequences for the global economy.

Russia remains the third largest oil producer in the world, behind Saudi Arabia and the United States itself. But his shipments are falling this year, according to a Bloomberg analysis of ship tracking data.

“The key channel, on which secondary tariffs for Russian energy buyers can influence the global economy, would be through the level of energy prices,” says Kieran Tompkins of consulting Capital Economics.

If the tariffs work, they will reduce the flow of Russian oil and gas to the world markets.

And with less supply, prices can rise just as they did when Russia released its full-scale invasion of Ukraine in 2022. This led to inflation around the world. President Trump says he is not worried about record oil production in the United States.

Tompkins points out that this time there are other reasons to assume that the impact on prices would not be so noted.

He explains that “the present background is the one where Opec+ (a group of large countries for the production of oil and its allies) have a significant free capacity to get.”

Russia has created an entire system for avoiding existing sanctions that could be useful in helping its commercial partners to avoid secondary tariffs at risk of Trump.

For example, its so -called “shadow fleet” – consisting of hundreds of unclear property tankers – can be used to conceal the origin of worn Russian oil and gas.

“Sanction maintenance is as large as the imposition of sanctions in the first place,” says US sanction expert Richard nephew at Columbia University.

“This is because the party, which is sanctioned, takes steps to avoid them.”

After the full-scale invasion of Ukraine in 2022, India is the second largest buyer of Russian oil, According to the Center for Energy and Pure Air ResearchS

“They nourish the military machine. And if they do it, then I will not be glad,” President Trump said, CNBC’s exit on Tuesday told us.

If secondary sanctions come into force, US companies buying goods from India will have to pay 100% import tax or tariff – when these products reach the US coast.

The idea is that this makes these goods so expensive that US enterprises will choose to buy them more expensive from other places, leading to lost revenue for India.

This, in turn, is assumed to be deter India from buying Russian oil. And if Russia remains unable to sell its oil elsewhere because other countries are facing the same difficulty, it will have less money to finance the war in Ukraine.

One of the ways in which Americans could have higher prices as a result of new secondary tariffs is to buy mobile phones from India.

The US company Apple moves a large part of its iPhone Production in India – more special the production of phones it wants to sell in the United States.

If these products are subject to new tariffs, prices can be doubled for US users. This is because the tariffs are paid by the companies that import goods – and these companies tend to pass the most, if not everyone, from increasing their costs to their customers.

US imports from India are already facing a 25% tariff as part of President Trump’s wider trade shaking, and he told CNBC that this number could be raised “very significant.”

The India government has accused the United States of double standards, pointing to Washington’s own long -term trade with Russia.

The bigger part of this trade consists of US imports from India, which last year amounts to just over $ 3 billion ($ 2.2 billion) – although it is only 10% of 2021 levels.

This trade is dominated by US purchases of raw materials for nuclear energy and fertilizers. Russia is a major global supplier of both.

China buys Russian oil and President Trump’s decision to impose secondary tariffs on Chinese goods would be much more challenging to implement.

This is because US imports from China cost five times more than India, and much more than these imports are consumer goods such as toys, clothing and electronics.

The secondary tariffs aimed at Beijing would also risk upsetting a lot Wider renegotiation of trade Between the two largest economies in the world that Trump has been chasing from his first term.

“This type of excessive escalation is unlikely to impress the Chinese,” says trading expert Professor Simon Elett of IMD Business School.

He explains that it would be “very difficult” to peel the Chinese away from the Russians for no good reason, given how closely the presidents XI and Putin have worked together In recent years.

On top of that, the last time Trump tried to use tariffs for a triple figure against China, he discovered that this was not working – as he almost interrupted all the trade between the two countries.

Another move like this may add inflationary pressure to the US, which Trump has long promised to cope.

It can also cost huge amounts of production jobs in China, at a time when its economy is already fighting on several fronts.

The analysis of the Finland-based research and clean air center shows that the EU and Turkey are also still among the largest buyers of Russian energy.

Prior to 2022, the EU was a number one export destination for Russia, although it was significantly reduced after the full -scale invasion of Ukraine. Brussels recently agreed to buy a lot More energy than the USBut there are some imports from Russia.

In June, European Commission President Ursula von der Leyen, acknowledged the problemSaying that “Russia has repeatedly tried to blackmail us by arming its energy supplies,” as it has exposed plans to terminate imports by the end of 2027.

The US-EU trade relations are the largest in the world and the couple have just negotiated new commercial terms Which will see a 15% tariff to be applied to most EU exports to the United States.

Many in the EU criticize this dealSaying that tariffs will hurt European exporters.

Now they are also fearing that secondary sanctions against the EU can cause even more harm. Adding 100% tariffs to buy Russian energy can significantly reduce the amount of goods sold by the EU in the United States.

However, the largest sellers include pharmaceuticals and machines that may be difficult for a source from elsewhere – which means that Americans have little choice but to pay more.

Russia’s own economy has so far proved to be remarkably sustainable since the start of the large -scale invasion of Ukraine, growing by 4.3% last year.

However, the Minister of Economy Maxim Presnikov, however Recently warned that the country is “on the threshold” of a recession after a period of “overheating”. The International Monetary Fund (IMF) predicted an increase of only 0.9% this year.

If secondary sanctions are successful in reducing export demand, they will push Russia closer to the recession.

The exact impact of the war on Russia’s economy is difficult to know, as Moscow prevents the publication of large amounts of economic data after the complete invasion – including for the production of oil and gas.

About a third of Russian government spending is funded by oil and gas money, but exports are decreasing.

In the meantime, Putin is focusing a greater share of defense spending than at any time after the Cold War. Defense costs are thought to have reached 6.3% of GDP.

In contrast, Ukraine spends a huge 26% of the value of its distant economy in the war. The difference explains why his President Volodimir Zelenski has repeatedly requested external assistance from his allies.

Trump’s tariffs aim to help Zelenski by reducing the amount of money entering Russia, and he hopes to end death, suffering and destruction in Ukraine.