A statutory deadline for secondary tariffs of up to 100 percent on the largest buyers of Russian energy falls this week, and with days to go Washington has produced neither the congressional justification the law requires nor a public waiver explaining why it will not act.
By the US Trade Desk | Peacock Tariff Consulting
WASHINGTON, Oct. 12, 2026 – A tariff deadline written into United States law three weeks ago arrives this week, and the single most important fact about it is what has not happened. The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed on Sept. 18, instructs the president to raise duties of up to 100 percent on goods from a defined group of countries that keep buying Russian crude oil and natural gas. The clock in the statute runs 30 days. That puts the operative date on Oct. 18, and with the deadline days away, neither the White House, the Office of the United States Trade Representative nor the Treasury Department has released the written justification the law requires Congress to receive before any such duty takes effect.
Trade counsel and corporate customs teams have spent the past week trying to work out what the silence means. The honest answer is that it can mean several things at once, and that importers on both sides of the question, those who would pay the duty and those who have been told to expect relief from a competitor’s exposure, are being asked to plan against a statute whose central term, the list of covered countries, has never been published.
What the statute actually requires
The Act is built in two tariff layers. Section 112 directs the president, within 30 days of enactment, to raise duties on all goods imported into the United States from Russia to as much as 500 percent ad valorem. The duties are cumulative with other applicable duties, fees, taxes and charges, and the statute sets no floor, only a ceiling. In practice this layer is more symbolic than commercial, because a large share of Russian commodities already sits behind outright United States import prohibitions, as the law firm Debevoise and Plimpton noted in a client alert published Oct. 7.
Section 113 is the provision that matters to global supply chains. It directs the president, on the same 30-day timetable, to raise duties of up to 100 percent ad valorem on goods from a covered country. A country becomes covered on either of two tests. The first is that it knowingly made new purchases of Russian crude oil or natural gas on or after the 30-day mark, and was among the five largest importers of Russian oil or gas by volume in the 12 months before enactment. The second is that it ranked among the top five countries facilitating evasion of sanctions on Russian oil over the same period.
Two features of that drafting have outsized consequences. The first is that the duties stack. Section 113 duties apply on top of whatever a country’s goods already face, which in the current United States tariff architecture can mean most favored nation rates, Section 232 metals and pharmaceutical duties, legacy Section 301 duties and the forced labor Section 301 tariffs imposed in July. The second is that the Act does not oblige the president to publish a covered country list before the first duties bite. According to a memorandum from Sullivan and Cromwell issued in late September, the statute requires a determination process but does not independently require the publication of the names.
There is a narrow carve out. Under Section 113(d), a country captured only on the natural gas test is exempt if its Russian gas imports stayed below 15 percent of Russia’s total annual gas exports during the measurement period and it has taken what the statute calls significant steps to cut those imports. There is no equivalent exception for crude oil, which is the reason the crude list, not the gas list, is where the commercial risk sits.
Once duties begin, the machinery becomes recurring. Within 180 days of the initial action, and every 180 days afterward, the Trade Representative, consulting the secretaries of State and Energy, must identify the five largest importers of Russian crude and the five largest importers of Russian gas over the preceding 12 months, and impose or maintain duties accordingly. The Trade Representative may adjust an individual country’s rate if its Russian energy purchases move significantly between review periods, and may set the rate anywhere above zero and up to the 100 percent ceiling. That is a wide band, and it is the band in which any eventual negotiation will take place.
The notice that has not appeared
Section 113(g) requires the president or the Trade Representative to transmit to the relevant congressional committees a written justification not later than 10 days before imposing a duty. The justification must give a substantive rationale for the rate chosen and explain the methodology used to decide that a country is covered.
Counting backward from Oct. 18, that notice was due around Oct. 8. A report distributed Monday by the news agency IANS said that as of that morning no justification had been released by the White House, the Trade Representative or the Treasury, and none had been reported. The same report observed, correctly, that the obligation is to deliver the document to six committees rather than to publish it, so a private transmission remains possible and would be invisible from outside. Several law firm alerts circulating last week made the same point in more cautious language.
The alternative route is a waiver. Section 115 lets the president waive any sanction, restriction or duty under Title I of the Act, including the tariffs, if he first certifies in writing to Congress that the waiver serves the national interest and submits a report explaining the basis for it. No waiver certification has surfaced publicly either. The result is a deadline approaching with neither of the two documents that would ordinarily precede it.
That vacuum has started to draw congressional attention. Seven senators led by Jeanne Shaheen of New Hampshire, the ranking member on the Senate Foreign Relations Committee, said Sunday that the administration had failed to consult Congress or explain a related decision on Russian diesel. Their statement, as reported, did not identify which specific reporting requirement had been missed, which is itself a telling detail about how opaque the implementation has been.
The diesel licence that focused attention
The proximate cause of the current friction is a Treasury action taken on Oct. 9. The Office of Foreign Assets Control issued General License 135, which authorizes Russian origin diesel to be sold, shipped and imported into the United States through April 7, 2027. Coming three weeks after a statute designed to tighten the screws on Russian energy revenue, and nine days before that statute’s first tariff deadline, the licence reads to critics as a signal about the administration’s priorities.
The commercial logic is not hard to reconstruct. United States retail diesel averaged $6.51 a gallon last week, close to double the level of a year earlier, and roughly 70 percent higher than before the Iran conflict, according to figures cited in an analysis published Monday by Modern Diplomacy. Diesel is the input price that moves freight rates, farm costs and construction costs, and it does so with very little lag. Three weeks before midterm elections on Nov. 3, with a Senate seat in Iowa rated a toss up, an administration weighing a fuel price against a sanctions principle has an obvious incentive.
For trade practitioners the licence is also a reminder of how Section 114 of the Act interacts with Treasury practice. That section preserves Treasury’s authority to issue or extend general licences, and exempts several categories from the Act’s restrictive measures, including humanitarian activity, civilian nuclear cooperation, certain low enriched uranium imports and medical isotopes. In other words, the statute was written with the assumption that the executive branch would tailor implementation through licensing. What is novel is the speed and the direction.
Who is in the frame
Because no list exists, the market is working from third party estimates. Unofficial rankings compiled by the Kyiv School of Economics and the Centre for Research on Energy and Clean Air place India second among buyers of Russian crude, behind China. Senate aides have indicated an indicative crude list of China, India, Slovakia, Hungary and Azerbaijan, with some assessments adding Turkey. India is not among the largest buyers of Russian gas, so for New Delhi the crude test is the only one that matters, and the gas carve out offers nothing.
The scale of what a Section 113 duty would cover is the reason this story is not an abstraction. Annual United States imports from China run to roughly $308.7 billion by the figure cited in Monday’s Modern Diplomacy analysis. A 100 percent duty applied on top of the existing stack would not be a tariff in any ordinary commercial sense. It would be a trade embargo administered through the customs system, and it would arrive while a negotiated truce between Washington and Beijing is still running.
India’s position is more delicate still, because New Delhi has already paid for relief once. Under the interim agreement announced in early February, the United States cut its tariff on Indian goods to 18 percent from 50 percent, and India undertook to wind down Russian crude purchases. Indian officials have since described a fuller trade deal as 99 percent complete. Yet Russian crude reached a record 50.8 percent of India’s imports in July, and Indian commerce minister Piyush Goyal has acknowledged in public remarks that the Russian oil condition remains a live point in the talks. Whether any duty attaches to Indian goods turns on whether Indian refiners book new Russian cargoes on or after the deadline.
Hungary and Slovakia present the problem the Act handles least well. Both still receive Russian crude through the Druzhba pipeline, and both are European Union members and NATO allies. The statute’s only exception runs to gas, not crude, so the pipeline does not help them. Hungary’s one year exemption from related measures expires Nov. 21. A 100 percent United States duty on Hungarian or Slovak goods would be the first time Washington used a secondary tariff of that magnitude against treaty allies inside the European single market, and it would raise immediate questions about the European Commission’s exclusive competence over the bloc’s external trade.
The enforcement picture behind the rankings
The second test, on sanctions evasion, rests on shipping data that is now reasonably well documented. In August, 61 percent of Russian crude moved on tankers already under sanction, the so called shadow fleet, while 72 percent of Russian oil products moved on vessels that were Western owned or Western insured. Over the same month, Indian and Turkish refineries shipped 510 million euros of refined products to countries that themselves maintain sanctions on Russia, including 143 million euros to the United States.
Those last figures describe the refining loophole that the Act’s evasion test is aimed at. Crude that is Russian in origin stops being Russian in origin once it has been processed in a third country, and the resulting diesel, jet fuel and gasoil can enter sanctioning markets lawfully. General License 135 now sits directly on top of that pattern, authorizing Russian origin diesel itself. A reader could be forgiven for seeing the two moves as working against each other.
Reaction
The Act was not a narrow partisan product. The Senate passed it 86 to 11 on Aug. 7, and the House followed 262 to 159 on Sept. 16. Those margins matter now, because they are large enough to make congressional irritation at non implementation a bipartisan phenomenon rather than a messaging exercise by the minority.
Senator Shaheen’s statement, joined by six colleagues, framed the diesel licence as a consultation failure rather than a policy disagreement, which is the formulation most likely to attract Republican signatures later. Supporters of the Act in both chambers have an institutional interest in the notice requirement being honored, because Section 113(g) is the mechanism through which Congress retains any visibility over a tariff power that otherwise runs for five years.
Outside government, the reaction has been more practical than rhetorical. Trade counsel have been advising clients with exposure to the indicative country list to model a 100 percent additional duty as a scenario rather than a forecast, and to check whether supply contracts contain change in law or duty allocation clauses that would determine who absorbs it. Several firms have pointed out that because Section 113 duties stack, the modelling exercise has to start from the current all in rate rather than from the most favored nation column.
Analysts covering the question have tended toward scepticism that the tariff fires at all this week. The Modern Diplomacy assessment put roughly 60 percent odds on a base case in which Russian state banks and shadow fleet tankers are sanctioned, no Section 113 tariff takes effect and General License 135 stays in place; about 25 percent on a downside in which India receives a token duty in the 10 to 25 percent range; and about 15 percent on an outcome in which congressional pressure narrows or ends the diesel licence early. Those are the author’s judgments rather than statistical forecasts, and should be read as such.
Economic stakes
The macro backdrop gives the administration reasons for caution beyond diesel. The Penn Wharton Budget Model put the average effective United States tariff rate at 7.1 percent as of June 2026, against 2.3 percent in January 2025. New tariffs raised an estimated $283.9 billion in gross customs revenue from January 2025 through June 2026, but roughly $166 billion of that was collected under the emergency economic powers authority that the Supreme Court declared unconstitutional on Feb. 20, 2026. Customs and Border Protection had certified about $100 billion in refunds through July, around 60 percent of the total. Netting the refunds out, the new tariff program has raised about $117.9 billion.
Against that ledger, a 100 percent duty on goods from China or India would be a very large gross revenue line and a very large consumer price line at the same time. The September consumer price index, due Wednesday, is forecast at 3.7 percent against 3.4 percent in August, with core at 2.5 percent against 2.4 percent. That release is the clearest read yet on how much of the existing tariff burden is reaching shelf prices. Adding a triple digit duty on a top three supplier three weeks before an election would be, at minimum, unusual sequencing.
What importers and exporters should do now
The practical guidance is unglamorous and should be underway already. Identify every tariff line sourced from the indicative covered countries, and build the landed cost twice, once at current rates and once with an additional 100 percent ad valorem layer applied on top of the existing stack rather than in place of it. Where the arithmetic makes a program uneconomic, the relevant question is not whether to resource but how long a resourcing would take and what it would cost to hold inventory in the interval.
Second, review contracts. Duty allocation, change in law and force majeure clauses decide who carries a statutory tariff, and many supply agreements drafted before 2025 are silent or ambiguous on the point. Where the counterparty is in a covered country, the clause is worth renegotiating before a duty exists rather than after.
Third, consider the timing mechanics. Section 113 duties, if imposed, would attach to entries made on or after the effective date. Importers with goods in transit should know their expected entry dates and should understand what bonded warehouse and foreign trade zone treatment would and would not achieve. Neither is a cure, but both can buy time where a duty is expected to be short lived or renegotiated.
Fourth, watch for the congressional notice rather than for a press release. Because Section 113(g) requires 10 days of advance written justification, the notice is the earliest reliable signal that a duty is actually coming, and it precedes the Federal Register. A transmission that becomes public through committee channels would reset every planning assumption in this article.
Finally, exporters should not assume the question is only inbound. Secondary tariffs of this size invite responses, and United States agricultural and manufactured exports to the countries on the indicative list are the most commonly used instruments of response. Firms selling into China, India or Turkey should be running the mirror image of the import exercise.
Outlook
Three outcomes are available this week. The administration can transmit a justification and impose duties at some rate below the ceiling, most plausibly on a single country and at a level designed to be negotiable. It can issue a Section 115 waiver and certify that non imposition serves the national interest, which would make the waiver, rather than the tariff, the operative policy. Or it can allow the deadline to pass without either document, leaving a mandatory statutory duty unexecuted and the question of enforcement to Congress and eventually to the courts.
The third outcome is the most consequential for trade practitioners, because it would establish that a tariff Congress wrote as mandatory can be left dormant indefinitely. That is a precedent with implications well beyond Russian energy, at a moment when the United States tariff program already rests on four separate statutory authorities and is being litigated under most of them. For now, the only thing importers can be sure of is that the law says duties are due, and that the paperwork which would make them real has not appeared.
Peacock Tariff Consulting will update this report if a congressional justification, a waiver certification or a Federal Register notice is published.