US President Donald Trump also imposed and waived the tariffs of a new law targeting Russian oil buyers in the same order, sparing countries like India and China a 100 per cent duty. The decision will be a welcome relief to Delhi. Its impact could stretch far beyond India.
What’s New Trump signed the bill Sept. 18. It demanded duties of up to 100 per cent on the largest buyers of Russian oil and gas within 30 days, a deadline falling on Sunday, October 18. The waivers in Friday’s order are open-ended, meaning there is no expiration date to plan around. The President’s powers under the law have largely been delegated to cabinet officials, with waiver authority now resting with the Secretary of State.
Delhi relief, but with a catch
Timing is everything. The order came as Secretary of State Marco Rubio is en route to India, where he is scheduled to visit Mumbai and Jamnagar October 17-22.
Indian analysts caution. The relief, however, was only temporary because the waiver could be pulled at any time, allowing the US to reinstate the tariff threat and use it as leverage in trade talks, the Global Trade Research Initiative said. It advised India to buy oil on commercial terms and not to grant permanent trade concessions in return for temporary relief.
India was already changing its sourcing. Russia’s share of Indian oil imports fell from 51 per cent in July to 44 per cent in August as India bought more from the US and UAE, although Russia remains its largest single supplier. Indian refiners expect Russian supplies to tighten further in October and November as exports fall and competition from China increases.
Why Dhaka Needs to Pay Attention
“Bangladesh is not directly targeted by the law, so its exposure to it is indirect. It still comes through several channels. These are not confirmed outcomes, these are analysis.
Fuel prices: Global crude markets had been volatile. The waiver announcement eased weeks of anxiety over oil prices. Stable benchmark helps drive and power cost control in import-dependent economies like Bangladesh.
Regional supply chains Indian refiners are pivotal in sub-continent fuel flows. Tariffs on India’s trade could have had knock-on effects on neighbors reliant on Indian refined products.
Trade diplomacy: The rapidity with which rules can change is evidenced by Washington’s readiness to threaten and then suspend penalties. Smaller South Asian economies negotiating their own US trade terms will take heed.
The Larger Picture
The waiver is also politically criticized. Recent reports say Trump is being criticized for double standards after signing a deal with Russia to buy oil. The open-ended nature of the sanctions suggests they are more of a bargaining chip than a fixed policy.
The lesson for South Asia is to be ready for uncertainty. Energy planners in Delhi, Dhaka and elsewhere should assume that this relief will be withdrawn as fast as it was given.
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