Analyst Milchakova assessed the consequences of the US imposing 500% duties on Russia`s partners.
The United States may impose 500% tariffs on countries that are Russia`s trading partners and do not support Ukraine. This was stated by US Senator Lindsey Graham (included in Russia`s list of terrorists and extremists) as a matter that is practically decided. «If you buy goods from Russia and don`t help Ukraine, your shipments to the US will be subject to a 500% tariff. India and China buy 70% of [Russia`s] oil, [this bill] will allow President [US Donald Trump] to impose tariffs on China, India, and other countries,» he said in a television interview. According to him, Trump also believes Congress needs to pass a bill on new restrictions against Russia.
The bill for 500% tariffs has reportedly been ready for some time, but the Trump administration has not pushed it forward until now. Leading analyst Natalia Milchakova of Freedom Finance Global discusses the likelihood and potential impact of this proposal.
According to the analyst, «hawks» in the US Congress are again pushing to pressure President Donald Trump into tightening sanctions against the Russian economy. Some senators have publicly discussed a bill that could mandate the president to impose 500% tariffs on goods from countries importing Russian oil. This bill was previously criticized, albeit cautiously, by US Secretary of State Marco Rubio and received a negative (though vague) response from the US President.
In her view, the chances of this bill becoming law are close to zero. The weakest point of such sanctions, she argues, is not merely the disregard for geopolitical realities and the resulting severe deterioration of US relations with China, India, Turkey, and other Russian oil importers. The main drawback, she states, is that they would harm the US economy itself.
The US economy is critically dependent on supplies of various goods, raw materials, and components from China, and also has a certain reliance on goods from India, another major importer of Russian oil. Consequently, 500% tariffs on Beijing, as the largest importer of Russian oil, could completely halt supplies of electronics produced in China and India to the United States. Not only would this cause electronics prices in the US to skyrocket, but it would also significantly damage American corporations that manufacture some of their products in China and India. Apple is the most prominent example, but many other US corporations, potentially including Tesla, would face issues.
Furthermore, if the US Federal Reserve were to lower interest rates under pressure from the Trump administration, inflation in the US could sharply increase again, causing financial problems for regional banks and several industrial enterprises. Therefore, according to the analyst, this «crazy proposal» from some Congressional «hawks» could open a financial «Pandora`s Box» for the American economy, businesses, and the dollar.
