Trump exempts Russia from additional 500% tariffs amid diesel deal dispute
Key Facts
U.S. President Donald Trump issued an executive order on October 16, 2026, granting exemptions from new sanctions and restrictions, including a 500% increase in tariffs on goods from Russia, according to a text published by the White House. The exemption covers tariffs imposed on those imports, subject to statutory exceptions. It also grants an exemption from a 100% increase in tariffs on goods from countries covered because they buy Russian oil and gas or facilitate evasion of oil sanctions. The decision thus extends to trade with Russia and countries dealing in its energy, alongside new sanctions. The order maintains the earlier sanctions it specifies, including sanctions imposed on individuals under executive orders concerning Russia.
As part of efforts to allow trade in Russian diesel, the U.S. Treasury Department's Office of Foreign Assets Control announced the issuance of Russia General License 135. The license authorizes covered transactions involving the sale, delivery, offloading and import of Russian diesel, according to the office's announcement. The authorization explicitly extends to imports of the fuel into the United States, according to the license text. However, it excludes debits to accounts held at U.S. financial institutions belonging to Russia's central bank, National Wealth Fund and Finance Ministry. Transactions requiring debits to those entities' accounts remain outside the authorization granted for diesel trade under the exception in the license.
U.S. Energy Secretary Chris Wright defended the diesel deal as a tool to encourage Russia to move toward ending the war. "This is an incentive to try to end a war," he said in an interview with ABC News. Wright linked Russia's ability to benefit from the deal to reducing domestic diesel consumption, scaling back its war effort or repairing its refineries. He cited reducing the war effort as one way Moscow could benefit from permission to export. His comments on refinery repairs came as Ukrainian drone strikes on Russian refineries severely hampered diesel exports, according to Axios.
Secretary of State Marco Rubio offered a different explanation for the deal, saying Russian diesel would have reached buyers regardless, according to Axios. "That diesel was going to be sold one way or another," it quoted him as saying. Rubio's explanation focused on continued sales, while Wright linked the deal to incentives involving the war effort, fuel consumption and refinery repairs. On volumes, Senator Angus King said the deal covers 300,000 tonnes of diesel for October. He added that the volume set for November is 500,000 tonnes, according to his statement on sanctions relief for Russia.
In Congress, Republican and Democratic senators called on Trump to cancel the diesel deal, according to a statement published by the Foreign Relations Committee. The signatories described the agreement as "a gift to our adversary and a betrayal of our allies." They also challenged its effectiveness in lowering fuel prices, saying allowing Russian diesel would have "little impact on fuel prices." In a separate statement published by the committee, senators challenged the legality of allowing Russian diesel imports into the United States. Their objection was based on Congress having explicitly banned Russian energy imports in 2022, according to their statement.
Opposition extended to the House of Representatives, where Representative Gregory Meeks introduced bipartisan legislation to block the agreement to buy and import Russian diesel. The bill is called the "Ban Corrupt Russian Oil Deals Act," according to the House Foreign Affairs Committee. It proposes revoking the relevant Treasury licenses and prohibiting future licenses, alongside barring U.S. Development Finance Corporation investments in Russian energy. Under the executive order, the exemption from new sanctions and tariffs continues until the president or secretary of state, in consultation with the relevant officials, determines that further action is appropriate. Authorization for transactions covered by the diesel license expires on April 7, 2027, according to the deadline specified in the Treasury document.