US warns tougher measures could ‘collapse’ Russia’s economy as Bessent urges Europe to join push

US warns tougher measures could ‘collapse’ Russia’s economy as Bessent urges Europe to join push

The United States on Sunday signalled a sharp escalation in its economic campaign against Moscow, with U.S. Treasury Secretary Scott Bessent saying coordinated new sanctions and “secondary tariffs” on countries that continue to buy Russian oil could push the Russian economy “into full collapse” and force President Vladimir Putin to negotiate an end to the war in Ukraine.

Speaking on NBC’s Meet the Press, Bessent said Washington stood ready to increase pressure but stressed that “we need our European partners to follow us,” framing the effort as a race between how long Ukraine’s armed forces can hold and how long the Russian economy can sustain the conflict. “If the U.S. and the (European Union) can come in, do more sanctions, secondary tariffs on the countries that buy Russian oil, the Russian economy will be in full collapse, and that will bring President Putin to the table,” he said. 

The comments came as President Donald Trump said he was prepared to enter a “phase two” of sanctions on Moscow, and after a week of frantic diplomacy in which Trump and Vice-President J.D. Vance held conversations with European leaders about ways to ratchet up pressure on Russia. The administration has already doubled duties on a major buyer — imposing tariffs of up to 50% on many Indian exports in August as punishment for New Delhi’s continued purchases of discounted Russian crude. 

What Bessent described — effectively extending punitive measures beyond Russia to penalise third-party buyers — is legally and politically possible, but hard to pull off without broad coordination among major markets. Secondary sanctions and reciprocal tariffs have been part of the U.S. policy toolbox in recent decades, used most visibly against Iran; their potency depends on the ability of Washington and partners to deny buyers alternative financial and logistical channels. Bessent acknowledged that the outcome would require European backing and careful timing as partners weigh the economic and geopolitical costs. 

European governments reacted cautiously in public. EU capitals have repeatedly said they are willing to reduce reliance on Russian oil over time: Brussels has a declared objective to phase out Russian crude and products by 2028. But officials in several member states have warned that immediate, sweeping secondary measures would carry heavy collateral damage — from higher energy prices to trade retaliation — and would risk rupturing fragile diplomatic ties with major buyers in Asia and the Middle East. The early diplomatic exchanges this month, including calls between Trump and European Commission President Ursula von der Leyen, underscored how difficult it will be to turn U.S. threats into a fully co-ordinated Europe-wide policy. 

Markets were already on edge. Oil prices have traded higher this month on supply-risk concerns and attacks on energy infrastructure in the conflict zone, though OPEC+ meetings and signals of increased output have at times tempered spikes. Traders and analysts warned that credible threats of sweeping secondary tariffs could push prices upward again if buyers are forced to find substitutes quickly or if Moscow responds with countermeasures. At the same time, a sudden, aggressive squeeze on Russian oil receipts could have destabilising knock-on effects — adding to inflationary pressure in energy-dependent economies while complicating central-bank decisions. 

The Biden-era model of coordinated transatlantic sanctions — which married U.S. financial firepower to EU trade measures and a G7 price cap on Russian crude — relied on a high degree of alignment among Western allies. Today’s political environment is more fractured. Several of Russia’s largest buyers, including China and India, have resisted dramatic cuts in purchases, arguing that access to cheaper Russian crude is an economic necessity. India, which has become the world’s biggest buyer of seaborne Russian oil since the 2022 invasion, has publicly rejected what it calls punitive unilateral tariffs and has indicated it will continue to weigh national energy security and commercial interests. That resistance makes the sort of joint U.S.-EU action Bessent envisages politically fraught. 

Legal and technical hurdles would also be substantial. Secondary sanctions often rely on the U.S. role at the centre of the global financial system — restricting access to dollar clearing, correspondent banking and the U.S. market for targeted entities. But imposing import tariffs on third-party buyers — a tool Bessent explicitly cited — would be broader and likely invite immediate retaliation, disputes at the World Trade Organization and legal challenges at home and abroad. Trade experts and some former sanctions architects warn that heavy-handed tariffs could push buyers to deepen alternative payment and shipping arrangements that blunt Western penalties, while also inflicting economic pain on exporters and consumers in countries the U.S. seeks to pressure. 

Russia’s likely response was not immediately apparent. The Kremlin has in the past publicly downplayed U.S. threats while pursuing ways to reroute trade and deepen ties with friendly partners. Analysts say Moscow would attempt to mitigate the shock by redirecting flows, using discounted spot sales, expanding barter and local-currency trade or invoking support from strategic partners. But analysts also note that the Russian economy has faced growing strains from years of Western restrictions, and that limiting its oil export revenues further would squeeze government finances and military procurement over time. 

Beyond economics, Bessent’s message is political: an effort to harden global incentives against Moscow while signalling to Kyiv and Western publics that Washington is prepared to push allies to a costly choice. Kyiv welcomed talk of greater penalties; President Volodymyr Zelenskiy said he supported measures that would penalise states continuing to buy Russian energy. But diplomats warn that alienating potential swing partners — including key Asian customers — could also close off tracks of pressure that the West still needs. The result could be a protracted standoff in which coercive measures escalate while Moscow seeks ways to adapt. 

For now, the immediate questions are practical. Will the EU and other European capitals sign on to a package that goes beyond existing sanctions? Can London, Brussels and Washington design penalties that choke off Kremlin revenue without provoking a backlash among countries the West needs for other strategic aims? And crucially, how will Russia respond on the battlefield if its energy receipts are squeezed further — by accelerating offensives, striking energy infrastructure, or leveraging other geoeconomic levers? Those are questions markets, diplomats and defence planners will be parsing in the coming days. 

What to watch next

In the short term, officials will focus on a round of transatlantic talks scheduled this week between U.S. and EU economic teams, where Bessent’s comments are likely to be discussed in detail. Energy markets will track tanker flows, OPEC+ statements and any signatories’ willingness to alter long-standing energy contracts. And diplomats will be watching for public pushback from large buyers such as India and China, which would make a coordinated secondary-tariff strategy far tougher to sustain.