Understanding secondary tariffs: Why few expect Trump to make good on his threat to Putin

Donald Trump’s shift in stance on Ukraine has been a long time in the making. Much has changed since the humiliating scolding of Volodymyr Zelenskiy in the Oval Office in late February, when Trump even blamed him for the Russian invasion. In the meantime, the Republican has gradually shifted toward much more moderate positions — at times even resembling those of his predecessor, Democrat Joe Biden. Vladimir Putin has gone from being a friend with whom Trump never fully lost contact, even during his four years out of the White House, to someone who “talks a lot,” who is “killing a lot of people,” and with whom Trump now says he is “very unhappy.”

The latest episode in this shift came on Monday, when Trump — flanked by his loyal sidekick and sycophant Mark Rutte, the NATO Secretary General — threatened secondary tariffs of up to 100% on Russia if Moscow doesn’t reach a peace deal within 50 days. It’s certainly a strong move, but one that financial markets don’t seem to believe: if they did, oil and natural gas prices would be skyrocketing — anticipating a massive exit of Russian energy from the market — instead of falling, as they did on Monday and continue to do this Tuesday.

“The oil market doesn’t buy the secondary tariff threats,” stressed analysts at Dutch bank ING in a quick note to clients. “The lack of any immediate action and the belief that these threats won’t be carried out help to explain the market reaction.” After dropping nearly 2% on Monday, just hours after Trump made his threat, Brent Crude remains in the red this Tuesday — a trend mirrored by gas prices.

A secondary tariff is, essentially, a levy on countries that purchase goods from a specific nation. Unlike a conventional tariff — which in this case would mean taxing Russian exports — the approach chosen by the White House aims to place all the pressure on nations that are the biggest buyers of Russian goods. “It’s about tariffs on countries like India and China that are buying their oil,” clarified U.S. Ambassador to NATO Matthew Whitaker a few hours later. The purchase of Russian crude has been banned in the U.S., the EU, and the rest of the G7 since 2022, shortly after the start of the Ukraine invasion. Natural gas, however, continues to flow freely.

Secondary tariffs, then, make perfect sense in this context: a conventional tariff would have little impact, since Russian exports to the U.S. are minimal — just $3 billion in 2024, according to U.S. government data — a third less than a year earlier and, remarkably, just one-tenth of the 2021 figure, before any sanctions were imposed on the Russian oil sector. Whether Trump’s threat will materialize remains to be seen — especially since it would mean the affected countries would have to pay a duty equivalent to the full value of the imported product, a truly staggering penalty.

Venezuela

The Venezuela precedent is the clearest test case for the threat against Russia. Trump’s own Secretary of Commerce Howard Lutnick used that very example on Monday to illustrate what may lie ahead. “It’s economic sanction,” said Lutnick. “He [Trump] said to Venezuela. He said, If you do business and you buy Venezuelan oil, right, your country will pay a tariff, right?”

What happened with the Latin American country, however, suggests caution is warranted. At the end of March, the Trump administration floated the possibility of imposing secondary tariffs on Caracas, but no developments have followed since then.

“Despite the fact that the threat remains, no country has been sanctioned for buying Venezuelan oil,” said Jorge León, vice president and head of oil analysis at the Norwegian consulting firm Rystad Energy, by phone. “It’s true that there are few Venezuelan barrels for export, around 200,000 per day. But one thing is also clear: China, its main buyer, has not been penalized in any way.” Spain, which until recently was the EU’s top importer of Venezuelan crude, has not purchased a single barrel from Venezuela since March.

No details

As often with Trump, the announcement came with few specifics, leaving plenty of room for speculation. Chief among the questions is whether the U.S. president would actually extend the proposed 100% tariff to European exports, given that the EU-27 still buy vast amounts of liquefied natural gas (LNG, which is shipped by sea) from Moscow. Although Brussels aims to fully eliminate Russian LNG by the end of 2027, last year alone it paid €23 billion ($26.7 billion) to Russia for it.

India and China would be the most affected by the potential 100% secondary tariff — for two key reasons: their extremely close trade ties with the United States (they are, respectively, the second and ninth largest exporters to the U.S.) and their dominant role as importers of Russian energy.

India has dramatically increased its purchases of Russian crude since Putin ordered the invasion of Ukraine in February 2022. So much so that, so far in 2025, one-third of the oil consumed by the world’s most populous country is now of Russian origin — compared to just 2% in 2021. The 100,000 barrels India bought from Russia that year surged to 1.9 million in 2024, according to the International Energy Agency (IEA).

Russian oil sales to China — which remains its largest buyer and is currently negotiating to put an end to its trade war with the U.S. — have followed a similar, though less extreme, trend: rising from 1.6 million barrels per day in 2021 to 2.4 million in 2024. This growth has been fueled both by the vacuum left by the end of Western purchases and by the Kremlin’s need to slash prices in order to keep oil flowing to market.

“The U.S. president’s statements are very serious,” said Vladimir Putin’s spokesman Dmitry Peskov on Tuesday. Soon after, Russian Foreign Minister Sergey Lavrov took it a step further: “We want to understand what this 50-day reference means [...] It’s clear that Trump is under enormous, frankly indecent pressure,” he said, naming the EU and NATO. “We’re already dealing with an unprecedented number of sanctions and managing well. I have no doubt we’ll handle these new measures too.”

His hope: that even if the U.S. ultimately follows through with its threat, neither China nor India will abandon what the Kremlin calls their “independent policy.” In other words, that they’ll keep buying Russian oil in large volumes.

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