US may pressure Kremlin towards peace - Economists propose new plan
Illustrative photo: A universal tariff may be imposed on Russia for oil and gas sales (Getty Images)
American economists propose implementing a universal tariff on the sale of Russian oil and gas. This could either force Putin to sit at the negotiating table or bring billions to the US, according to The New York Times.
American economists Glenn Hubbard and Catherine Wolfram mentioned in the publication that US President Donald Trump needs new methods to push Russian dictator Vladimir Putin toward negotiations and ending the war.
Given the situation, they suggested a simple way to improve Washington's influence on the peace process. According to them, sanctions should be imposed on anyone selling Russian oil and gas in any country around the world. Russia could avoid these so-called "secondary sanctions" by paying a fee to the US Treasury for each delivery.
"The payment would be called a Russian universal tariff, and it would start low but increase every week that passes without a peace deal," the specialists noted.
If Russia does not pay these fees, secondary sanctions would be imposed on all parties involved in the transaction, including tanker owners, insurers, and buyers.
According to the latest information, Indian and Chinese companies that import significant volumes of oil from Russia and have not imposed their sanctions are reluctant to fall under US sanctions. All such shipments by tankers are closely monitored by both commercial parties and the US.
Solid profits instead of control over mines
In the economists' opinion, unlike the agreement on controlling Ukrainian mineral resources, such a tariff would immediately bring substantial profit to the US. According to their calculations, a $20 fee per barrel of oil could generate up to $120 million a day and more than $40 billion a year, with additional revenue possible if a similar fee is applied to natural gas. Every dollar collected by the US is money that Russia cannot use to fund its war.
"Ideally, the policy would pressure Russia into negotiations, where its removal could be part of a deal. If not, the United States would still collect billions annually, which could help fund Mr. Trump’s proposed tax cuts. In that scenario, Russia would effectively be helping repay the US tax dollars used to provide aid to Ukraine to defend itself against Russia’s assault," the columnists wrote.
Hubbard and Wolfram are convinced that while Trump considers this strategy, Congress could strengthen his negotiating position by passing a bill to implement such a universal tariff on Russia. This would give the US President additional leverage over Moscow and encourage the Kremlin to reach a peace agreement.
"Combining secondary sanctions, a strong tool in the U.S. economic kit, with a tarifflike fee could pressure Mr. Putin by threatening his most valuable source of revenues. It would also make it easier for Mr. Trump to deliver on his promise of a lasting peace,"the economists concluded.
Ukraine-Russia energy truce
On March 18, Trump held a phone talk with Putin. During the conversation, the dictator agreed to stop striking Ukraine's energy infrastructure for 30 days.
However, the Russian side has not followed through on this agreement and continues to attack Ukrainian energy facilities.
