Newly Enacted Law Targeting Russia Creates Novel Tariff Authority Over Third-Country Imports, While Reinforcing Existing U.S. Sanctions Framework

Key Points

• On September 18, 2026, President Trump signed into law the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. The Act passed the House of Representatives by a vote of 262-159 on September 16, following Senate passage by 86-11 on August 7.
• The Act requires the President to impose tariffs of up to 100% on all goods imported from countries that are among the top five importers of Russian crude oil or natural gas, or among the top five facilitators of Russian oil sanctions evasion. These tariffs stack on top of all other existing duties. The Act also requires the President to increase duties on Russian-origin goods up to 500%.
• In addition, the Act mandates secondary sanctions against third-country persons and vessels engaged in specified categories of Russia-related conduct, as well as primary sanctions on certain Russian persons. These provisions largely overlap with existing sanctions authorities, and despite the mandatory language, the President retains significant discretion over their implementation. Separately, the Act codifies pre-existing Russia sanctions into statute, raising the procedural bar for their removal.
• The Act provides a broad national interest waiver applicable to both tariffs and sanctions and includes a five-year sunset for those provisions.
• The Act also extends the Iran Sanctions Act of 1996 through 2031.

New Tariff Authority

The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026’s (H.R. 5334, the Act) tariff provisions are its most novel and consequential feature—and the one that generated the most opposition during the legislative process. The new tariff authorities are applicable to goods of both Russia and certain other countries.

As it relates to goods of Russia, Section 112 requires the President to impose tariffs on all Russian-origin goods up to 500%. The Act specifically calls out various petroleum, natural gas and coal products as subject to this requirement.

More broadly, Section 113 authorizes the President to impose so-called secondary tariffs on certain categories of countries based on their purchases of Russian oil or natural gas, or their activities to facilitate the evasion of U.S. sanctions on Russia. Key features of the tariff authority in Section 113 include:

• Comprehensive Product Coverage – The Act provides that “all goods” from an affected country shall be subject to the tariffs.
• Discretion on the Rate – The law gives the President significant discretion on the applicable duty rate, providing that it shall be “up to 100% ad valorem.”
• Tariff Stacking – The tariffs stack on top of all other existing duties, including duties under Sections 122, 201 and 301 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962 and Section 338 of the Trade Act of 1930, as well as antidumping and countervailing duties.
• Timing – The President must impose these tariffs within 30 days of enactment, and his administration must re-determine which countries are among the top five purchasers of Russian oil and natural gas every 180 days.

Given the significant delegation of new tariff authority, the lack of clarity in the statutory text, and the President’s tendencies to leverage tariffs as negotiating tools, U.S. importers should closely monitor administration actions under the Act against their supply chain maps.

A. Which Countries Are in Scope?

In addition to Russia, Section 113 of the Act requires the President to impose tariffs on two categories of countries:

1. Countries that knowingly made new purchases of Russian-origin crude oil or natural gas after enactment and were among the top five importers during the preceding 12 months of Russian oil or natural gas, or
2. Countries that were among the top five “countries facilitating Russian oil sanctions evasion” during the same period. Such countries are further defined to include countries in which foreign persons knowingly provide significant financial or other support for the purchase, loading or shipment of sanctioned Russian-origin oil, or engage in conduct related to a shadow fleet vessel transporting sanctioned Russian-origin oil.

Based on publicly available trade data, the two countries most likely to be in scope as major importers of Russian energy are China and India. Other countries that proponents of the bill¹ suggested could be subject to its authorities include Azerbaijan, Hungary, Kazakhstan, Kyrgyzstan, Singapore, Slovakia, Turkiye and the United Arab Emirates.

That said, the Act gives the President discretion regarding the identification of these countries. It does not specify what data sources should be used to identify the countries, or how to quantify actions of countries that would place them among the top five countries “facilitating Russian oil sanctions evasion.” The administration may reach different conclusions than outside observers about which countries meet the statutory thresholds.

The Act also requires the Office of the United States Trade Representative (USTR) to consult with the Secretary of State and the Secretary of Energy every 180 days after imposition to reassess which countries are the five largest importers of Russian oil and natural gas based on the most recent 12-month period preceding that determination. The Act then directs USTR to impose duties on those countries, but the text is ambiguous regarding what should happen to any duties previously imposed on countries that may fall out of the top five lists in subsequent periods.

B. Flexibility, Exemptions and Limitations

While the Act requires the President to increase the tariff rate on countries subject to its provisions, the Act also expressly prohibits the President from imposing the duties on a country if that country’s imports of Russian natural gas were below 15% of Russia’s total gas exports over the preceding 12-month period and the country has taken “significant steps” to reduce those imports. Notably, no comparable exemption exists for crude oil purchasers. The natural gas exemption is structurally similar to the “significant reductions exemption” framework used in Iran secondary sanctions legislation from 2012, under which countries that demonstrably reduced their purchases of Iranian oil could avoid secondary sanctions—a mechanism that historically provided a pathway for major energy importers to achieve compliance incrementally rather than face immediate penalties.

In addition, subject to certain congressional reporting requirements, USTR may adjust tariff rates based on changed behavior like raising or lowering rates on countries that buy more or less Russian oil or natural gas. However, Congress did not mandate the termination of duties imposed under the Act when certain conditions are met. Rather, the Act states that the President “may terminate” a duty when Russia and Ukraine have reached a peace agreement, or when the country is no longer engaged in the activity that was the basis for the duty (or has reliable assurances that it will not engage in such activity).

Finally, the President may waive any duty under the Act by certifying to Congress that the waiver is in the national interest—a very broad standard. These mechanisms suggest that the administration has considerable latitude in implementation and could use the tariff authority as leverage—particularly as a negotiating tool in bilateral discussions with in-scope countries—as well as an across-the-board trade measure.

Sanctions

The Act mandates both primary and secondary sanctions related to Russia, but its practical impact on the existing sanctions landscape is more incremental than the statutory language and public statements from key sponsors might suggest. The categories of Russia-related conduct for which third-country actors could be targeted under the Act’s secondary sanctions provisions are already largely sanctionable under existing authorities, particularly Executive Order 14024, which was used heavily under the Biden administration but infrequently to date under the current Administration. Examples of such categories described in the Act include, for example:

• Transactions involving Russia’s defense-industrial base or the Russian military
• Certain activities contrary to Ukrainian security
• Helping Russia-related persons move energy products or other goods to evade sanctions
• Transporting Russian-origin energy products or providing services to vessels that transport them
• “Significant transactions” by foreign financial institutions with Russian financial institutions subject to primary sanctions.

The Act also codifies pre-existing sanctions on Russian and relevant third-country actors, and it makes them more difficult to lift without congressional acquiescence. Accordingly, the Act reinforces the existing Russia sanctions framework rather than fundamentally changing it.

A. Mandatory in Name, Discretionary in Practice

Despite the Act’s use of mandatory language—the President “shall” impose sanctions—the actual imposition of sanctions remains conditioned on affirmative Presidential “determinations” that the relevant conduct has occurred. If the President declines to make those determinations, no sanctions obligation is triggered. The experience from the Countering American Adversaries Through Sanctions Act of 2017 (CAATSA) is instructive: while many of that statute’s Russia sanctions provisions are similarly “mandatory,” the Biden administration and the Trump administration declined to make certain arguably “required” determinations, drawing criticism from members of Congress but no legal consequences. The Act also preserves broad national interest waiver authority (Section 115) and—critically—maintains the Office of Foreign Assets Control’s (OFAC) existing authority to issue, extend or modify general licenses without congressional review (Section 114), as well as the President’s power to exercise all other authorities provided under the International Emergency Economic Powers Act to carry out the Act’s sanctions provisions (Section 116). As with CAATSA, we would expect OFAC to issue implementing guidance, including FAQs, explaining how it will interpret the various provisions of the Act. Companies should monitor these developments closely in the coming months.

Policy Considerations and Risks

The Act’s passage is notable given the protracted path to enactment. The bill faced considerable opposition over the scope of its tariff authorities, which remained the primary source of Democratic opposition, and it took significant time to secure the administration’s support.

On the tariff side, companies with supply chains connected to countries that are significant importers of Russian energy or that could be identified as facilitators of Russian oil sanctions evasion should assess potential exposure and monitor the administration’s implementation decisions closely.

On the sanctions side, while the Act’s provisions largely reinforce the status quo, their codification into statute—combined with a congressional review mechanism for any formal termination—could create political pressure for the administration to pursue Russia-related sanctions designations in areas where it has not been exercising existing discretionary authorities and to refrain from lifting existing Russia-related sanctions on certain individuals and entities. Alternatively, the Act could provide the administration with diplomatic cover to pursue more aggressive “mandatory” sanctions measures against Russia while continuing to attempt to coax the Russians back to the negotiating table with the Ukrainians.

Whether the Act meaningfully shifts the risk calculus will ultimately depend on how aggressively this administration chooses to exercise these authorities, as well as any implementing guidance that USTR, OFAC or other relevant agencies may issue in the coming weeks and months.

Footnote

1. Rep. Steny Hoyer (D-MD), who supported the bill, offered an amendment in the House Rules Committee on September 14, 2026 to directly name these countries as subject to the tariff authority rather than relying on a list of the top five purchasers of Russian oil or natural gas and who facilitate evasion of U.S. sanctions on Russia.