Trump waives Graham Act Russia tariffs and bank sanctions two days before deadline

President Donald Trump signed an executive order late on Friday, October 16, waiving the main Russia-related sanctions and tariffs required by the Graham Act. The order came two days before the October 18 implementation deadline, according to CNBC and ABC News. Trump told Congress in a certification that the waiver served the national interests of the United States. The order gave no further explanation.

The decision removes the prospect of new US tariffs on large buyers of Russian oil and gas, including China and India. It also suspends a package of financial restrictions aimed at Russian state banks and sovereign debt. The move drew praise from Moscow and criticism from Ukraine’s president and from lawmakers in both US parties.

What the order suspends

The act was passed by the House on September 16 and signed by Trump two days later, CNBC reported. It was named for the late Senator Lindsey Graham, its main sponsor. Under its terms, the president had to raise duties on Russian goods by up to 500% within 30 days of enactment. He also had to impose tariffs of up to 100% on countries among the top five purchasers of Russian crude oil or gas.

ABC News reported that the order waives every operative Russia-related section of the law. That includes the two tariff requirements above, plus 100% tariffs on the top five countries helping Russia evade oil sanctions. It also covers the following financial measures:

• Sanctions on foreign banks that do significant business with Russian state-owned banks and with financial messaging services used to evade sanctions.
• A ban on purchases of Russian sovereign debt.
• A ban on US investment in Russia.
• A ban on US banks and brokers processing transfers to the Russian government or for the benefit of Russian officials.

CNBC noted that the order leaves in place existing sanctions on Russia imposed under earlier executive orders. Euromaidan Press reported that the waiver relies on Section 115 of the act. That section lets the president set aside sanctions and duties by certifying to Congress in writing that doing so serves US national interests and by submitting a report explaining why. The same outlet said the section does not allow cancellation of sanctions that have already been announced.

The law firm commentary site Diplomacy and Law, citing the text of the order, said the waiver has no fixed expiry. It stays in force until the president or the Secretary of State decides, after prescribed consultations, that further action is appropriate. Fox Business described the arrangement as preserving the president’s power to reinstate the measures.

Background: diesel diplomacy

The waiver follows a separate easing of Russian diesel sanctions the previous week. ABC News reported that the Treasury’s Office of Foreign Assets Control issued a general license running through April. It authorizes the sale, delivery and import of Russian diesel into the United States. The Hill reported that, under the accompanying arrangement, Trump said Russia could immediately begin supplying 300,000 tons of diesel, followed by 500,000 tons in November and then one million tons.

The Hill linked the policy to efforts to lower fuel prices, which have risen during the US war with Iran. Al Jazeera described the conflict, now in its eighth month, as part of the biggest energy supply shock on record. A Reuters market report from October 12 said the diesel deal and an announced Russia-Ukraine energy ceasefire had not made a strong start in calming energy markets. ABC News described the Graham Act waiver as the second time in two weeks that Trump has waived Russia-related sanctions as he seeks relief from high diesel prices.

Reactions

Ukrainian President Volodymyr Zelenskyy criticized the decision on X. He called it wrong and said it “definitely helps only the Russians,” according to CNBC. CNBC also reported praise from a Russian envoy, and Euromaidan Press said Moscow described the step as historic.

Fox Business reported bipartisan criticism, with Senator Ted Cruz and former UN Ambassador Nikki Haley among Republicans calling it a mistake. Haley warned that it could embolden President Vladimir Putin. Euromaidan Press described a bipartisan revolt in Congress, including from the law’s own backers. Asked about the decision on Saturday, Trump defended his approach but offered no detail, Fox Business reported.

Strategic implications

For major buyers of Russian energy, the order lifts a looming threat of US market-access penalties. Diplomacy and Law noted that the suspension affects China, India and other importers such as Turkey. It also noted that none of these countries had been formally identified for the 100% duties. Such tariffs work through access to the American market rather than by banning purchases outright, the same analysis said. As a result, their effect depends on each country’s exposure to US trade and on its alternative markets.

The financial provisions were arguably the most consequential for the sanctions architecture. Secondary sanctions on foreign banks dealing with Russian state lenders, and a ban on Russian sovereign debt purchases, would have widened the compliance burden for institutions outside the United States. With those provisions waived, the existing sanctions framework remains the operative baseline.

The decision also adds to strains in Western coordination on Ukraine. The administration is prioritizing fuel prices, while Kyiv and congressional supporters of the law argue the waiver weakens pressure on Moscow. Details of the US report to Congress explaining the national-interest rationale may clarify the administration’s reasoning.

What to watch

• Market open on Monday: the first read on how oil, diesel, rouble-linked and Chinese and Indian asset prices respond, as the order was signed after Friday’s close in most markets.
• Congressional response: whether the bipartisan criticism turns into hearings, letters or legislation aimed at constraining the waiver, and what the Section 115 report to Congress contains.
• Diesel deliveries: whether the 300,000-ton initial volume and the 500,000 tons promised for November materialize, and how Treasury uses the general license that runs through April.
• Reinstatement signals: any statement from the president or Secretary of State that conditions have changed, since the waiver has no end date.
• Allied and buyer reactions: responses from the EU, Kyiv, Beijing, New Delhi and Ankara on sanctions alignment and energy purchases.

Sources

• Trump waives broad new Russia sanctions, Zelenskyy condemns it as 'wrong' (CNBC)
• Trump signs order waiving Graham Act sanctions on Russia (ABC News)
• Trump waives Russia sanctions as Cruz and Haley call it a mistake (Fox Business)
• Russian sanctions, tariffs under Graham Act waived by President Donald Trump (Fox Business)
• Trump waives Russian sanctions outlined in Graham Act before they take effect (The Hill)
• Congress gave Trump 30 days to hit Russia's oil buyers with 100% tariffs (Euromaidan Press)
• Did Trump Lift Russia Sanctions? What the October 16 Waiver Changes (Diplomacy and Law)
• Trading Day: Fog of war (Reuters via Investing.com)
• War and high debt to dominate IMF-World Bank meetings in Bangkok (Al Jazeera)

Top image: Ad Meskens / Wikimedia Commons (CC BY-SA 3.0)

This article was produced by the Intelligence Report Desk. Sources are linked below.