Concerns grow about tariffs in US sanctions bill on Russia

By Timothy Gardner and Patricia Zengerle

WASHINGTON, July 15 (Reuters) - Potential tariffs in a U.S. bill imposing sanctions on Russia drew concern from Democratic lawmakers on Wednesday who said it could give President Donald Trump new powers to impose trade measures on India, Japan and some countries in the EU. 

Republican and Democratic senators on Tuesday released a bill, championed by the late Senator Lindsey Graham and supported by President Donald Trump, that allows the U.S. president to place 100% tariffs on goods coming from the top five buyers of Russian oil and natural gas. The legislation, which has been pending for about a year, is meant to cut revenues from the sale of Russia's energy for its war on Ukraine.  

Lawmakers eased the tariff level in the legislation to 100% from a blanket 500% included in a previous version of the bill, in order to win support. But it still spiked concerns in Congress about potential new powers for Trump.

The top five purchasers ​of Russian crude are China, India, Slovakia, Hungary and Azerbaijan, and the top importers of Russian natural gas are China, France, Japan, Hungary and Belgium, Senate aides for supporters of the bill said. 

The bill allows tariff exceptions for countries that import less than 15% of Russia's natural gas exports and take significant steps to reduce those imports. That exempts Japan, France, Hungary and Belgium, the aides said. 

Any country could be exposed to the tariffs if it takes more than 15% of Russia's gas and does not take steps to reduce its imports, said the Senate aides.

OUTSOURCING RESPONSIBILITY

Senator Ron Wyden, the top Democrat on the Senate Finance Committee, and Representative Richard Neal said the tariffs in the bill could result in higher prices for U.S. consumers. 

“Congress must stop outsourcing responsibility for trade and tariffs to a runaway executive who is more interested in consolidating his own power than in the welfare of the American people,”  they said in a statement. 

Separately, a document prepared by the Democratic staff on the Finance Committee, a copy of which was seen by Reuters, listed concerns. "Additional countries can continually be brought into scope, and vague scoping criteria give Trump far too much opportunity to abuse these powers," the document said. 

There is no mechanism for congressional disapproval of any tariffs, and the authority for the president never expires, it said. 

Representative Gregory Meeks, the top Democrat on the House Foreign Affairs Committee, praised sanctions in the bill on Russia's shadow fleet and energy infrastructure, but expressed concerns about the tariffs.  

"This is not so much a sanctions bill as it is a massive backdoor authority for President Trump to impose more tariffs, including on our European allies, that hurt American families," Meeks said. 

The White House did not immediately respond to a request for comment about the legislation. It is not certain when it will come up for votes in Congress.

Fernando Ferreira, the director of geopolitical risk service at consultancy Rapidan Energy Group, said he expected that Trump could use the threat of tariffs in the bill as a bargaining chip in trade talks with countries including India. But he expected the sanctions to be more effective. 

"Any vessel, insurer, reinsurer, or senior crew tied to Russian sanctions evasion becomes sanctionable," he said, adding that the bill pulls the EU's much larger list of sanctioned vessels "straight into U.S. enforcement without requiring a fresh case for each one."

(Reporting by Timothy Gardner and Patricia Zengerle; Editing by Andrea Ricci )