On Monday, President Trump set a brand new 10 to 12-day ultimatum for President Vladimir Putin to enter peace talks over Ukraine or face a brand new tariff regime supposed to halt international gross sales of Russian power merchandise.
Trump is promising a 100% “secondary tariff” on any nation that imports Russian power merchandise, targeting India, China, Turkey and others. He’s proper to acknowledge that pressuring the Kremlin’s primary money cow is a solution to seize Putin’s consideration, however his method is counterproductive and incomplete.
There are two methods to alter Putin’s plans in Ukraine. The primary is to cease Russia’s capability to wage its struggle of alternative by constraining its funds. Oil and gasoline gross sales account for a few quarter of the Kremlin’s funds. The G7, together with the U.S., has taken steps because the onset of the struggle to decrease Russia’s power revenues. Final month, the Kremlin’s tax proceeds from power gross sales have been at their lowest since January 2023; nonetheless, the Russian authorities nonetheless pocketed about $6 billion.
This reveals the tradeoff within the G7’s preliminary goal — dent Russian revenues with out totally blocking the sale of Russian oil. The G7 has tried this balancing act as a result of Russian oil exports nonetheless make up 7 % of worldwide oil supply and a full shut-in would roil power markets the world over.
Trump’s new plan proposes to do precisely that. To stave off the specter of U.S. tariffs, importing nations could cease accepting Russian oil. With out Russia’s 7 million barrels per day of oil exports in the marketplace, international crude oil costs may shoot up nearly 25 %, even assuming different suppliers like OPEC have the capability and need to select up half the slack.
Costs on the pump in America would then climb simply as tariff-induced inflation hits the economic system at a time when almost two-thirds of Individuals disapprove of Trump’s dealing with of inflation.
The opposite state of affairs, by which some importers defy Trump’s menace, is just not significantly better. The imposed secondary tariffs would additional ignite inflation in America, particularly if they aim Chinese imports.
One other ratcheting up of tariffs timed concurrently with will increase we noticed in bilateral tariffs yesterday may destabilize Wall Avenue’s fairness markets once more, all whereas quickening worth will increase on Primary Avenue.
Putin understands these dynamics; that’s why the secondary tariff menace received’t convey him to the desk. It’s true that blocking the gross sales of Russian oil can be an enormous hit to the Kremlin, however he sees this as an empty menace as a result of the plan is expensive not simply to Russia however to the entire world and, particularly, America.
As an alternative, Trump can implement a special tariff to assault Russia’s revenues with out inflicting collateral chaos. With present authorities, the Trump administration can impose sanctions on any firm or particular person on the planet concerned in a Russian oil and gasoline sale. Wanting to take care of entry to America’s monetary system, most will search to keep away from sanctions.
The U.S. may allow transactions if Russia pays a cargo price on every sale — a Russian universal tariff — to the Treasury Division. From there, the U.S. may ratchet this tariff up month by month if Putin drags his ft on negotiating. Financially squeezed over time, Putin will really feel more and more boxed in.
The second solution to change Putin’s calculus is by fortifying Ukraine financially and militarily. Proper now, the Kremlin sees international help for Ukraine waning, with residents in America and Europe fatigued of funding a international struggle.
However we don’t have to depend on our personal taxpayers to again the Ukrainian folks. As an alternative, the U.S. and G7 ought to seize the $300 billion value of Russian sovereign property already frozen in our nations and commit them to supporting Ukraine’s protection and reconstruction.
Doing so will foil one in all Putin’s primary methods. Regardless of a standstill on the battlefield, he thinks he can convey Ukraine to its knees by destroying its economic system. That can show a lot more durable if Ukraine can entry Russia’s frozen property.
Along with monetary help, Trump and Congress ought to decide to offering Ukraine with the navy assets it must proceed defending itself. After the 2024 election, Putin thinks he can wait out Ukraine’s restricted arsenal. Trump must flip the script and clarify {that a} struggle of attrition is just not winnable for Russia.
His decision to unpause beforehand permitted navy help was a great first step. However to pressure a rethink from Russia, Trump should go additional. Committing to arming Ukraine with the weapons made by American workers and companies till Russia agrees to and upholds a ceasefire will just do that.
After years of extended battle and pointless dying, there’s a clear have to pressure Putin’s hand. President Trump’s intuition is correct, however his method is unsuitable.
To get Russia off the battlefield and to the desk, he should delineate a plan that makes negotiating Putin’s most suitable choice, and that’s one which hinders the Russian struggle machine, helps Ukraine and garners help from Individuals and our allies.
Samarth Gupta is a Rhodes Scholar who served within the Treasury Division as a coverage advisor and particular assistant for Russia-Ukraine from 2022 to 2025. His writing could be discovered on wickedgoodpolicy.com.