A week after Donald Trump signed his new Russia sanctions law, Europe still does not know whether its tariffs will land on European exports. Brussels is asking Washington for guarantees, while Hungary is already lobbying for an exemption.
The European Commission has “clear expectations” that the new US law “should not impose new commercial barriers in the bilateral EU–US relationship”, a spokesperson said on 23 September. “We will engage with the US with a view to ensuring this outcome,” the spokesperson told Euronews. A day earlier, EU foreign policy chief Kaja Kallas said on the sidelines of the UN General Assembly that she hoped the law would not hurt European partners.
US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act into law on 18 September. The House of Representatives passed it two days earlier by 262 votes to 159, and the Senate had cleared it by 86 votes to 11 in August. Ukrainian President Volodymyr Zelensky called the law “critically important” and urged Washington to implement it “fully and swiftly”.
Who is in the firing line
The law’s Section 113 lets the president impose duties of up to 100 per cent on all goods from the largest importers of Russian crude oil and natural gas, and from the biggest facilitators of Russian oil sanctions evasion. The EU was Russia’s fourth-largest fossil fuel customer in August, paying €1.2bn, according to the Centre for Research on Energy and Clean Air.
Backers of the law argue that Europe is safe anyway. It includes a carve-out for countries whose Russian gas imports are below 15 per cent of Russia’s total gas exports and which have taken steps to cut them. But the exemption covers gas only. Hungary and Slovakia, which still take Russian crude oil through the Druzhba pipeline, have no such protection.
Hungary is already pushing for a way out. Its new government is lobbying Washington to withhold penalties for its continued purchases of Russian crude oil, Bloomberg reported on 21 September. Márton Hajdu, who chairs the Hungarian parliament’s foreign affairs committee, said he asked US lawmakers to help exempt Hungary while it diversifies its supplies. A one-year US sanctions exemption that former Prime Minister Viktor Orbán secured last November expires on 21 November, according to the Hungarian foreign ministry.
The clock is now ticking. The tariffs apply to top importers that knowingly make new purchases of Russian oil or gas on or after 18 October, 30 days after Mr Trump signed the law. The administration must make its first determinations by the same date, law firm Squire Patton Boggs notes. The law names no countries, and it leaves undefined what counts as “significant steps” to cut gas imports, which gives the White House broad room to decide who qualifies.
The single-country loophole
The bigger question is whether Washington could treat the EU as a single country. The law bars duties on countries that do not meet its criteria and caps how many can be targeted. According to the Congressional Research Service, that arguably rules out tariffs on a union of 27 member states. Yet on 14 September, House Democrats tried and failed to add an amendment that would have stopped the administration from treating the EU as one country, The Atlantic reported.
“There are no guardrails or restrictions,” trade lawyer Peter Harrell told The Atlantic, warning that the administration could apply the law to the EU as a whole. When tariffs have been challenged in court, the US has kept collecting them while the cases dragged on.
The law arrives months after the Supreme Court stripped Mr Trump of broad tariff powers in February. “This bill is clearly meant to provide a new discretionary, Congressionally approved tariff weapon,” said Nevada Joan Lee of the European Council on Foreign Relations.
Tough law, soft enforcement
Daniel Fried, a former US sanctions coordinator, wrote for the Atlantic Council that his bigger fear is that the administration “will simply issue waivers and not use the tough provisions much at all”. Eric Ciaramella of the Carnegie Endowment told The Atlantic that Mr Trump already has plenty of ways to hurt Europe, and that the law is only “a marginal increase in that risk”.
Not necessarily new sanctions, but above all the enforcement of existing ones.
— Ursula von der Leyen, President of the European Commission
The Commission says it will work with Washington to limit disruption. Commission President Ursula von der Leyen argued in the State of the Union that what was needed was “not necessarily new sanctions, but above all the enforcement of existing ones”. Mr Trump now has his new tariff tool. Who knows how he will define ‘country’.
