US Senate bill on Russia sanctions risks backfiring against European allies

Europeans have spent the last year and a half urging Washington to use its financial power to impose severe sanctions on Russia.

They may soon find themselves regretting that appeal.

A draft bill making its way through the US Senate, ostensibly designed to cripple Moscow's war chest, risks handing President Donald Trump a brand-new instrument to slap punishing tariffs on allies and adversaries alike.

The legal text was originally promoted by Republican Senator Lindsey Graham and Democratic Senator Blumenthal, two staunch supporters of Ukraine's fight for survival, in a bid to prod Trump into tightening the screws on the Kremlin – something that the president has consistently refused to do.

Graham's sudden death last month has given fresh impetus to the stalled project, with fellow senators seeking to honour his legacy by enshrining it into law. The text still faces an uncertain future in the House, which adjourned for its summer recess.

Ukrainian President Volodymyr Zelenskyy attended Graham's funeral to pay his respects and make the case for the sanctions.

"This bill is very important," Zelenskyy said in Washington, flanked by senators. "It's also a big signal to Europe, a big signal to Ukraine, a big support of our people."

The legislation envisages a wide range of primary sanctions and duties against Russia, including sweeping prohibitions on financial transactions with banks and institutions. State officials, oligarchs and "shadow fleet" vessels are equally targeted.

But its most striking element comes later on. Section 113 confers on the US president the authority to apply tariffs of up to 100% on "all goods" imported from countries that are among either the five largest importers of Russian oil and gas or the five countries "facilitating" the circumvention of sanctions on Russian oil. Those who make "new purchases" of Russian oil and gas are also on the firing line.

The decision on who qualifies is made by the White House alone.

Promoters of the bill have repeatedly insisted that these secondary tariffs are intended for China and India, whose consumption of Russian fossil fuels has been credited with injecting a life-saving revenue stream into the Kremlin's coffers.

But experts and scholars have raised the alarm about the spiralling effects that the provision might have in practice. The expansion of executive power, the vague wording of the definitions, and the weak Congressional oversight all risk empowering Trump in his relentless ambition to redefine commerce and diplomacy through steep tariffs.

Early this year, Trump suffered a bruising defeat when the Supreme Court struck down the "reciprocal" tariffs he had introduced through the International Emergency Economic Powers Act (IEEPA), leaving him without a major legal tool.

As an alternative, his administration has relied on Section 301 of the 1974 Trade Act, alleging that other trading partners, including the European Union, have failed to tackle forced labour practices. (Brussels forcefully contests the accusation.)

Trump's controversial interpretation of Section 301 – already under legal review – sets a dangerous precedent for what he might do if the Graham-Blumenthal bill ever sees the light of day. Tariffs could end up taking centre stage, with sanctions as an afterthought.

"The bill was deliberately structured around tariffs rather than sanctions to appeal to President Trump and improve its political prospects, with traditional sanctions authorities playing a secondary role," Maria Shagina, a senior fellow at the International Institute for Strategic Studies (IISS), told Euronews.

"In practice, however, tariffs are more likely to serve the administration's broader trade and domestic political agenda than to exert sustained economic pressure on Russia. As a result, the bill may ultimately expand presidential trade powers more than it strengthens the sanctions regime."

Vague and expansive

The momentum around the bill comes at a precarious time for EU-US trade relations.

The European Commission's recent decision to slap a €890 million fine on Googleover alleged self-preferencing practices and unfair treatment of app developers unleashed Trump's fury and cast doubt on the long-term viability of the Turnberry agreement, which was signed to limit US tariffs at a maximum of 15%.

"The European Union will pay a very high price for this illegal and highly unethical conduct," Trump said. "We anticipate a substantial TARIFF to be placed on them."

Coincidentally, Trump is showing stronger interest in the Graham-Blumenthal bill than he did last year, when he still had IEEPA at his disposal.

The new law can equip his administration with a legal basis to assail the EU if need be.

After all, the bloc remains one of the top consumers of Russian LNG: imports soared in the first half of this year ahead of a permanent ban scheduled for January 2027, reaching nearly 10 million metric tons. Pipeline gas continues flowing but to a lesser extent.

The current version of the law includes a small clause to exempt countries that have taken "significant steps" to reduce purchases of Russian gas, which appears to have been designed to shield European allies.

However, this determination is left entirely to the executive's discretion, meaning the White House could use the recent surge in imports – or any other tangential number – as a reason to hit the EU hard.

The provision to tax countries that "facilitate" the evasion of Russian oil sanctions leaves even greater room for manoeuvre, speaking in broad terms about "transactions, activities or services" that circumvent or help others to circumvent.

Greece, Cyprus and Malta play a key role in the global trade of Russian oil, which they do lawfully under the price cap. Meanwhile, Hungary and Slovakia still buy Russian crude through the Druzhba pipeline thanks to an open-ended derogation.

The fact that the EU is not a country but a group of 27 could further blur the lines.

Asked about the potential risks, a Commission spokesperson declined to comment on the substance of the draft bill and instead highlighted the EU's efforts to phase out Russian fossil fuels since the start of the full-scale invasion of Ukraine.

"We aim to align our sanctions where possible with our partners, both through bilateral contact and in the G7, to achieve our shared goal of putting maximum pressure on Russia," the spokesperson said.

"We continue to engage with the US on these issues."

Europeans may take some comfort in the "rule of construction" that the bill promoters have inserted to ensure the 100% tariffs will be applied only to countries that meet the criteria "expressly described" in the legal text.

This makes the bill more restrictive by design than IEEPA, which Trump invoked to target virtually all trading partners, and Section 301.

"There are also many ambiguities in text and in how the law would be administered. So the current situation is one of considerable uncertainty," Alan Sykes, a professor of international law at Stanford University, said.

"I do not know what the data would show about who is buying the most Russian gas and oil, and even less about what countries could be deemed major facilitators of sanctions evasion. So the general sense is that there is a risk that the law could end up targeting allies, but no one knows."

The draft text also offers the option to issue a duty waiver "in the national interest" of the US, but this too is left entirely at the president's discretion. The Commission previously expressed confidence that the EU would receive such a waiver.

But Trump's fury at the Google fine signals scarce appetite to show mercy.

Nevada Joan Lee, a policy fellow at the European Council on Foreign Relations (ECFR), argues the White House already enjoys broad authority to sanction Russia if it wants to and does not require new legislation to that effect.

"This bill is clearly meant to provide a new discretionary, Congressionally approved tariff weapon – up to a rate of 100%. That should worry Europeans," Lee said.

"The exemptions that are meant to shield allies are written such that this President himself ultimately gets to judge who qualifies."