US loath to drop 'economic bunker buster' on China, India, Russia
US Senator Lindsey Graham recently said that his bill to impose 500% tariffs on every country that imports Russian resources is 'an economic bunker buster against China, India, and Russia' – yet, for all his tough talk, the US is still reluctant to drop it.
The Wall Street Journal reported that the Trump Administration is 'quietly pressuring' the Senate to water down the legislation by turning 'the word 'shall' into 'may' wherever it appears in the bill's text, removing the mandatory nature of the prescribed reprimands.'
The Journal's report was lent credence when Graham himself proposed an exemption for countries that aid Ukraine, thus averting an unprecedented US-EU trade war in the event that his bill passes into law. Trump's remark to Politico in mid-June about how 'sanctions cost us a lot of money' suggest that he's not interested in going this route, with Secretary of State Marco Rubio later adding that sanctions could derail the Ukrainian peace process, although he also didn't rule them out in the future.
These are sensible explanations for the United States' reluctance to drop its 'economic bunker buster' on Russia but they don't account for its reluctance to drop it on China and India, which have served as invaluable valves for Russia from the West's sanctions pressure due to their large-scale import of its oil.
Graham expects that they'll cut off their purchases if the US threatens them with 500% tariffs but they're unlikely to comply since they know that the US would also harm its own economy through such means.
Not only that, but the trade deal that US and China recently agreed to would be jeopardized, as would the ongoing talks with India over a similar such agreement. Trump is pleased with both and doesn't want to rock the boat right now.
While he might revert back to his previous tariff pressure if things don't go his way, he could just unilaterally impose more tariffs against either in that scenario, and they probably wouldn't be anywhere near the counterproductive level that Graham's legislation demands.
Seeing as how the US is once again trying to 'subordinate India,' which is part of his administration's efforts to reshape South Asian geopolitics, he's more prone to imposing higher tariffs against it instead of China but it's premature to predict that he ultimately will. In any case, the pretext probably wouldn't be energy-related given that he has surprisingly posted that 'China can continue to purchase Oil from Iran' in spite of early February's Executive Order that explicitly aims to 'drive Iran's export of oil to zero.'
It would therefore be utterly bizarre for Trump to impose tariffs of any level on India or whoever else for purchasing Russian resources when he now no longer cares about the United States' systemic rival China purchasing oil from none other than Iran, which he just bombed, in defiance of his own decree.
The aforementioned calculations make it very unlikely that Trump will drop Graham's 'bunker buster' on either of those two. If his bill should become law, it's likely that a loophole would be found to avoid complying with it.
This prediction brings the analysis back around to the future of Graham's 'economic bunker buster.' Quite clearly, the Trump Administration doesn't want him to move it through Congress. He may respect the administration's wishes, thus leading to his bill becoming nothing but bluster. This is especially likely if his team signals that it's already found a loophole to get around it unless he changes the language as reportedly requested.
China, India, and Russia, therefore, almost certainly have nothing to worry about.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
2 hours ago
- South China Morning Post
Trump's ICE raids leave California crops unpicked as workers vanish
Lisa Tate is a sixth-generation farmer in Ventura County, California, an area that produces billions of dollars' worth of fruit and vegetables each year, much of it hand-picked by immigrants in the US illegally. Tate knows the farms around her well. And she says she can see with her own eyes how raids carried out by agents from US Immigration and Customs Enforcement (ICE) in the area's fields earlier this month, part of President Donald Trump's migration crackdown, have frightened off workers. 'In the fields, I would say 70 per cent of the workers are gone,' she said in an interview. 'If 70 per cent of your workforce doesn't show up, 70 per cent of your crop doesn't get picked and can go bad in one day. Most Americans don't want to do this work. Most farmers here are barely breaking even. I fear this has created a tipping point where many will go bust.' In the vast agricultural lands north of Los Angeles, stretching from Ventura County into the state's central valley, two farmers, two field supervisors and four immigrant farmworkers said that the ICE raids have led a majority of workers to stop showing up. That means crops are not being picked and fruit and vegetables are rotting at peak harvest time, they said. One Mexican farm supervisor, who asked not to be named, was overseeing a field being prepared for planting strawberries last week. Usually he would have 300 workers, he said. On this day he had just 80. Another supervisor at a different farm said he usually has 80 workers in a field, but today he had just 17.
South China Morning Post
4 hours ago
- South China Morning Post
Trump administration says Harvard violated civil rights of Jewish students
The US government told Harvard it violated federal civil rights law in its treatment of Jewish and Israeli students, ratcheting up the pressure on the oldest and richest US university to reach a settlement with the Trump administration to restore funding. Advertisement 'Harvard has been in some cases deliberately indifferent, and in others has been a wilful participant in anti-Semitic harassment of Jewish students, faculty, and staff,' according to a letter sent to Harvard President Alan Garber. 'Failure to institute adequate changes immediately will result in the loss of all federal financial resources and continue to affect Harvard's relationship with the federal government.' Harvard didn't immediately provide a comment in response to the letter, which was first reported by the Wall Street Journal. The government's finding included reports that the 'majority of Jewish students reported experiencing negative bias or discrimination on campus, while a quarter felt physically unsafe.' The letter raised the prevalence of pro-Palestinian campus protests in the wake of the Hamas attack on Israel in October 2023 and the Jewish state's retaliatory response in Gaza, and how the university failed to adequately discipline students who broke university rules. The White House has for months made Harvard its primary target in its mission to reshape higher education, cancelling more than US$2.6 billion in research funding, threatening its tax-exempt status and attempting to block international students from attending the school. The government initially accused Harvard of fostering antisemitism, but the attack has expanded to include accusations of political bias and for promoting diversity initiatives in hiring and admissions. Harvard President Alan Garber speaks during the 374th Harvard Commencement in Harvard Yard in Cambridge, Massachusetts, on May 29. Photo: AFP It is part of a broader campaign influenced by Trump adviser and deputy chief of staff of policy Stephen Miller, which has also gone after top colleges including Columbia, Cornell, Northwestern and Yale.
South China Morning Post
9 hours ago
- South China Morning Post
Trump's ‘Big Beautiful Bill' is a debt bomb. Can the ‘Pennsylvania Plan' defuse it?
With the US Senate voting to move an updated version of US President Donald Trump's sweeping budget legislation – the 'One Big, Beautiful Bill Act' – forward in the legislative process, the controversial bill now comes closer to becoming law. It has also brought the country's mounting debt back into the spotlight. Rife with spending increases, tax cuts and no additional revenue sources to compensate, the bill has been estimated to add US$3.3 trillion to the nation's debt over the next decade; a deficit that stands at about US$36.2 trillion. In response to renewed concerns over US debt, a nascent framework on how to rebalance deficits away from foreign holders – the 'Pennsylvania Plan' – has also received attention. Here, we provide an update on the latest developments in the saga of the 'One Big, Beautiful Bill' and its relationship to the recommendations made in the 'Pennsylvania Plan'. What is the bill, and how close is it to passage? The US Senate agreed to hear debate on the bill in a narrow 51–49 decision after a long weekend session, following another close party-line approval from the House of Representatives last month.
