The U.S. Senate passed a sweeping new sanctions bill on Friday, August 7, targeting Moscow’s energy revenues in what could become the most consequential piece of Russia-related legislation since the war in Ukraine began. The bill, dubbed the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” authorizes tariffs of up to 100% on countries that continue importing Russian oil and gas (Al Jazeera).

A Bill Years in the Making

The legislation had been stalled for months, previously blocked by the Trump administration before securing White House approval in the days before its passage. Senator Lindsey Graham, working with a bipartisan group of colleagues, called the measure one that “will make a decisive impact that goes beyond what can be achieved on the battlefield,” according to Al Jazeera’s reporting on the Senate vote.

The bill’s scope extends well past Russia’s direct trading partners. Reporting from the Hindustan Times flagged that India risks new US tariffs over its continued purchases of discounted Russian crude, illustrating how the legislation is designed to pressure third-country buyers, not just Moscow directly (NewsNow aggregation).

Why Now: Russia’s Oil Windfall From the Iran War

The timing is notable. According to a mid-year assessment from the Kyiv School of Economics Institute, the Iran war has inadvertently boosted Russian oil export earnings, which climbed from an average of $10.4 billion per month in January–February to $21.5 billion in April and $20.8 billion in May as global energy prices spiked (KSE Institute).

That windfall has complicated Western sanctions strategy. The KSE Institute’s analysis notes that disruptions to global energy flows caused by the Iran war have prevented more transformative measures against Russian energy exports, even as the EU has continued layering on incremental sanctions packages — its 21st so far — targeting the shadow fleet and anti-circumvention structures.

The Domestic Squeeze Continues Regardless

Even with the oil windfall, Russia’s underlying fiscal position remains under strain. The Moscow Times reports that Russian authorities are hiking the value-added tax rate from 20% to 22% starting January 1, 2027, while lowering the mandatory VAT registration threshold from 60 million to 10 million rubles — a move that will sweep far more small businesses into the tax net (The Moscow Times).

Forbes contributor analysis from mid-July estimated Russia’s 2026 growth at just 0.4%, down from an already weak 1% in 2025, even as the economy remains dependent on fossil fuel revenues that bring in roughly €734 million a day (Forbes). The World Bank, meanwhile, projects a global oil supply surplus will push Brent crude down to around $60 a barrel on average in 2026 — the lowest in five years — which would sharply cut into the same export revenues the Iran war has temporarily inflated.

What the New Sanctions Regime Adds

Beyond the Senate bill, the UK’s Office of Trade Sanctions Implementation published fresh guidance on August 3 covering banknote trade restrictions with Russia and Belarus, part of a broader tightening across Western jurisdictions (Fieldfisher). China has also been drawn into the sanctions crossfire: on July 24, Beijing added 14 EU-based companies to its own export control list in retaliation for the EU’s designation of 14 Chinese and Hong Kong entities under its Russia sanctions package — a sign the sanctions fight is becoming a genuinely multipolar affair rather than a purely US-Russia dispute.

The Bottom Line

The Graham bill’s real test will come in implementation. Secondary tariffs on buyers like India and China carry significant diplomatic and economic risk for Washington itself, given how deeply intertwined those countries are with US trade and investment flows. Whether the administration follows through on the threatened 100% tariffs — or uses the legislation primarily as negotiating leverage — will shape both the endgame of the Ukraine war and the next chapter of global energy markets.

For Russia, the near-term picture is one of contradiction: elevated oil revenues from a war it isn’t party to, layered atop a domestic economy showing every sign of a prolonged, tax-funded slowdown.

What does the new US Russia sanctions bill do?

The Senate-passed “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026” authorizes tariffs of up to 100% on countries, including India, that continue importing Russian oil, gas, and uranium, aiming to cut off Moscow’s energy revenues.

Russia’s federal budget deficit hit 4.58 trillion rubles — roughly $58.8 billion, or 1.9% of GDP — in the first quarter of 2026 alone, already surpassing Moscow’s entire annual deficit target of 3.79 trillion rubles, according to Finance Ministry data reported by The Moscow Times. Total revenue fell 8.2% to 8.3 trillion rubles even as spending jumped 17% to 12.9 trillion rubles.

Oil Revenue Is the Core Problem

The pain concentrated almost entirely in energy receipts. Oil and gas revenue collapsed 45.4% year-on-year in the first quarter, according to Meduza, which attributed the decline primarily to falling global oil prices alongside reduced export volumes following repeated Ukrainian drone strikes on major export terminals including Ust-Luga, Primorsk and Novorossiysk. By April, cumulative hydrocarbon revenue for the year had fallen 38.3% to $30.6 billion, according to analysis published by Ukraine’s foreign intelligence service, SZRU, which noted all three key energy revenue streams — additional income tax, gas export duty, and mineral extraction tax — collapsed simultaneously.

How the Kremlin Is Plugging the Gap

Two mechanisms are absorbing the shock. First, Moscow raised its base VAT rate by 2 percentage points to 22% starting in 2026 and stripped most small-business VAT exemptions, pushing non-oil-and-gas revenue up 10.2% even as the broader economy weakened, according to SZRU’s analysis. Second, and more significant, the treasury has leaned heavily on domestic debt markets: OFZ bond placements delivered 1.7 trillion rubles net over four months, covering 45% of the annual deficit, according to a contrarian assessment from the New Eurasian Strategies Centre.

That analysis argues the more likely 2026 outcome isn’t fiscal collapse but simply higher spending financed by cheap debt — revenue collection is running 3-4 percentage points behind the pace of recent years, but reserves and borrowing capacity remain deep enough that the “fiscal squeeze” narrative may overstate near-term risk.

The National Welfare Fund Problem

The structural issue is longer-term. Since early 2025, oil prices have stayed below the threshold needed to replenish Russia’s National Welfare Fund (NWF), meaning the sovereign buffer that absorbed prior shocks is no longer being topped up, according to the OSW Centre for Eastern Studies. Finance Minister Anton Siluanov has acknowledged the original 1.6%-of-GDP deficit target may need revision, alongside discussion of tightening Russia’s fiscal rule parameters, per Interfax.

Corporate Stress Is Spreading

The fiscal strain is showing up in the private sector too. More than half of large Russian companies ended 2025 with declining profits and frozen investment plans, and roughly 300 companies were reportedly preparing to close as of late February 2026, according to Ukrainian intelligence reporting cited by NV. For the first time on record, 74 of Russia’s regional budgets (oblasts) reportedly fell into deficit simultaneously.

The bottom line: Russia’s 2026 fiscal position is genuinely deteriorating relative to plan, but with deep reserves and functioning debt markets still available, the more accurate framing is a slow-motion transition to war-financed deficit spending rather than an acute crisis — one whose durability depends almost entirely on how long global oil prices stay depressed.

The US is imposing 10–12.5% tariffs on 60 countries over forced-labour enforcement gaps. Here’s what it means for Canada, Pakistan, and global sourcing.

Most tariff coverage in 2026 has focused on headline-grabbing bilateral fights — Section 232 metals duties, the US-Canada CUSMA review, reciprocal tariff threats. But a quieter measure moving through the USTR process may end up touching more of global trade than any single country-specific tariff: a forced-labour enforcement tariff applied not to a handful of adversaries, but to 60 economies accounting for 99% of US imports.

In mid-2026, the US Trade Representative proposed tariffs of 10% to 12.5% on imports from 60 economies — covering roughly 99% of US imports — after finding these countries had not adequately enforced bans on forced-labour goods. Countries with partial enforcement commitments face the lower 10% rate; the rest face 12.5%, with a special mechanism for apparel and textiles.

What the rule actually does

The USTR’s findings state that these 60 economies have failed to adequately prohibit or enforce bans on goods made with forced labour, which the agency frames as a source of unfair competition against countries that do enforce such bans. The proposed structure is two-tiered: a 10% tariff for countries that already have some form of forced-labour import prohibition or have committed to implementing one, and a 12.5% tariff for the remaining countries. A separate mechanism would allow limited apparel and textile imports at reduced rates, softening the blow for garment-dependent exporters.

Canada is on the list despite being a treaty partner under CUSMA — a reminder that forced-labour enforcement gaps are being treated as a distinct trade-policy lever, separate from tariff and quota negotiations under existing free-trade agreements.

Why this is the underreported story

Coverage so far has treated this as a compliance footnote inside broader tariff news. It deserves more attention for three reasons:

1. Scale: unlike sector tariffs on steel or autos, this rule touches nearly the entire US import base at once, which means the aggregate cost pass-through to US consumers could exceed any single sector-specific measure.
2. Enforcement burden shifts downstream: exporting countries — including major garment and electronics suppliers in Asia — will need to demonstrate active supply-chain auditing, not just legal prohibitions on paper, to qualify for the lower rate.
3. Leverage point beyond trade: it gives Washington a tool to press human-rights and labour-standards issues inside what looks, on the surface, like a routine tariff schedule.

What exporters and sourcing teams should watch

• Whether their country lands in the 10% or 12.5% tier once USTR finalises findings after the July 2026 comment period
• Documentation requirements for the textile/apparel carve-out
• Whether affected governments respond with formal labour-enforcement commitments to shift tiers before the rule takes effect.