Last year, U.S. President Donald Trump imposed an additional 25% tariff on India because of its purchases of Russian oil. Peter Navarro, Mr. Trump’s trade adviser, went so far as to describe Russia’s invasion of Ukraine as “Modi’s war”, accusing India of financing Russian aggression through energy transactions. Last month, Mr. Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act into law, authorising him to impose tariffs of up to 100% on countries purchasing Russian energy, including India and China. Yet, last week, Mr. Trump announced an agreement to purchase Russian diesel, with 300,000 tonnes to be released immediately into the “American and global marketplace”, followed by another 5,00,000 tonnes in November. Soon after the announcement, the Treasury Department suspended sanctions on Russian diesel exports until April 7, 2027. Mr. Trump’s reversal offers an important lesson for countries such as India, which have faced criticism and penalties for conducting business with Russia. This latest policy change also highlights inconsistencies in Western strategic thinking. The West targeted Russia’s energy industry with sanctions to weaken Vladimir Putin’s “war machine”. Four years later, the U.S. started bombing Iran. As the conflict with Iran pushed fuel prices higher, Washington temporarily relaxed restrictions on Russian fuel before negotiating an agreement with Moscow.
Apart from exposing the contradictions and strategic shortcomings of American policy, Mr. Trump’s diesel agreement also demonstrates the limitations of Western sanctions. Following Russia’s attack on Ukraine in 2022, Western countries pursued a two-part strategy: damage the Russian economy through sanctions and weaken its military by supplying weapons to Kyiv. These measures had consequences on both sides, placing pressure on Russia’s economy while disrupting trade between Russia and Europe and pushing European economies, especially Germany, into serious difficulties. To reduce the effects of sanctions, Moscow turned towards Asia, where China and India were prepared to purchase Russian fuel at discounted prices. The developments also reflect wider changes in the global economic order. Mr. Trump’s reversal puts Ukraine and Europe in a difficult position, particularly as Moscow intensifies attacks on Ukraine and challenges NATO through grey-zone operations. If Brussels believes that extending the conflict will achieve its strategic objective of exhausting Russia in Ukraine, it could be mistaken, given Mr. Trump’s apparent lack of interest in NATO’s collective defence or Kyiv’s security. Instead, European leaders should prioritise a diplomatic settlement. If Mr. Trump can negotiate a diesel agreement with Mr. Putin during the conflict, he should also cooperate with the warring sides, European allies and his new partner in Moscow to establish a ceasefire and reduce tensions between Russia and NATO. Meanwhile, the U.S. and Europe should refrain from lecturing Global South countries for maintaining trade relations with Russia.