US-China Trade Truce Extended: Why India Faces Greater Risk From New US Tariffs on Russian Oil Buyers
The United States and China agreed to extend their trade truce, known as the Busan Agreement, until January 10, 2027. It was earlier due to end on November 10, 2026. The extension was announced on September 23, 2026 after talks between the US Treasury and China's Vice Premier.
A few days earlier, on September 18, 2026, a new US law, the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, came into force. It lets the US President put tariffs (import taxes) of up to 100% on goods from the top five buyers of Russian oil and gas.
The law passed the US Senate by 86 to 11 and the House of Representatives by 262 to 159. The President has wide discretion: he decides which countries face the tariffs, at what rate, and whether to waive them.
The Global Trade Research Initiative (GTRI), an Indian trade think tank, says the truce gives China practical protection from these tariffs. This could leave India as the main large buyer exposed to them.
According to GTRI, China takes about 50% of Russia's crude oil exports, India about 36%, Turkey about 6% and the European Union about 5%.
GTRI advised that India should not give up its energy security (a steady, affordable supply of fuel) for short-term tariff relief, and should not sign an unequal trade deal.
Economic Sanctions: Primary vs Secondary Sanctions
Economic sanctions are penalties that one country puts on another to force it to change its behaviour, using money and trade instead of weapons. Primary sanctions stop a country's own people and companies from dealing with the target country. Secondary sanctions go one step further: they punish third countries and their companies for doing business with the target. A new form of pressure is the secondary tariff, where the punishment is a higher import tax on all goods from the third country, not just a ban on certain firms.
The 100% tariff threat on Russian oil buyers is a clear example of a secondary tariff. It punishes India and China not for what they do with the US, but for what they buy from Russia. Because the waiver is fully in the President's hands, a trade truce like the one with China can decide who is actually hit.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement is a trade deal that India and the United States are negotiating to make it cheaper and easier to sell goods and services to each other. It works by cutting tariffs and removing other trade barriers. Talks gained speed in 2025 after the US imposed high tariffs on Indian goods. India has "red lines" it does not want to cross, such as opening up sensitive farm and dairy sectors.
GTRI warns that the US may use the 100% tariff threat as pressure to get India to accept a trade deal on US terms. That is why its advice links the two issues: India should not trade away energy security or accept an unequal BTA just to escape a tariff threat.
The US-China Trade War: Origins and Escalation
The US-China trade war is a long fight between the world's two biggest economies, fought with tariffs, export bans and other trade weapons. It began in 2018, when the United States put heavy import taxes on Chinese goods, and China hit back with its own tariffs. Since then it has moved in cycles: sharp escalation, then a pause or truce, then fresh conflict. It matters for India because every move between these two giants changes prices, supply chains and trade pressure across the world.
The Busan truce, first agreed in October 2025, has now been extended to January 10, 2027. By keeping peace with China, the US has less reason to use its new 100% tariff power against Beijing. This shows how a pause in the US-China trade war can shift pressure onto India, the second-largest buyer of Russian crude.
- Busan Agreement (US-China trade truce) extended from November 10, 2026 to January 10, 2027; extension announced September 23, 2026.
- Busan Agreement originally agreed on October 30, 2025 in Busan, South Korea.
- Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 signed on September 18, 2026; Senate vote 86 to 11, House vote 262 to 159.
- Tariffs of up to 100% allowed on the top five buyers of Russian oil and gas (12-month look-back); up to 500% on Russian-origin goods.
- Gas exemption: countries buying less than 15% of Russia's gas exports and cutting those imports.
- Waiver: President can waive by certifying the US national interest to Congress.
- Share of Russia's crude exports (GTRI): China about 50%, India about 36%, Turkey about 6%, EU about 5%.
- August 2025: extra 25% US tariff on India over Russian oil (total 50%); February 2026 interim understanding cut it to 18%.
- Iran Sanctions Act of 1996 extended through 2031 by the new law.