Opinions | How to punish Russia, make money for the United States and end the war in Ukraine

Even as Russia and Ukraine held a ceasefire with U.S. representatives in Saudi Arabia, it was clear that Russian President Vladimir Putin had little practical commitment to ending the war in progress on Tuesday.

President Trump needs some better cards.

A few weeks ago, the president proposed the idea of ​​sanctions and tariffs on Russian imports. But the Kremlin has been dismissing, mainly because the United States imports very little from Russia. Extensive financial and trade sanctions have been imposed, most of which have been around for about three years and are clearly not enough to bring peace.

Fortunately, there is an easy way to improve American hands. The government should impose sanctions on any company or individual involved in the sale of Russian oil and gas. Russia can avoid these so-called secondary sanctions by paying per-stock fee to the U.S. Treasury. Payments will be called universal Russian tariffs, and it will start to be lower, but will increase weekly without a peace agreement to pass.

Ships bring most Russian oil and gas to the world market. Secondary sanctions (if Russia does not make the required payment) will fall on all parties to the transaction, including tanker owners, insurers and buyers. Recent evidence confirms that Indian and Chinese entities (whose states import large amounts of oil from Russia and have not imposed penalties on the Russian economy in the Ukrainian war – do not want to get caught up in U.S. sanctions, which makes the idea feasible. Another factor in its favor: Business parties and U.S. authorities carefully tracked traffic on all such tankers.

Secondary sanctions are powerful tools: Violators can be isolated from the U.S. financial system, and even apply to transactions that do not directly involve U.S. companies. They have been used to limit Iranian oil exports and require payments for Iranian oil in restricted accounts until sanctions are lifted. Our recommendations take this approach to another level. Under our plan, a portion of Russian oil and gas will be paid to the U.S. Treasury Department before Russia agrees to a peace agreement. The goal is to make Russian oil flow to global markets, but it costs less money to go to the Kremlin. The plan fell into Russia’s ability to continue the war and put the money into the U.S. government’s cultural library.

In Russia, fossil fuel income and military spending are intertwined, although the country can also utilize its sovereign wealth funds and other sources. Fossil fuel exports provide the Kremlin’s main source of income, which depends on hard currency to buy weapons and other military supplies from abroad and pay North Korean soldiers. The country currently exports about $500 million in crude oil and petroleum products per day, worth $100 million in natural gas. The Kremlin’s budget is slightly lower, with nearly $400 million per day spent on military spending in 2025.

Unlike the proposed Ukrainian key mineral fund, universal Russian tariffs will immediately fund the United States, which will take years to generate any return. The cost per barrel of oil is $20, which can incur up to $120 million per day (more than $40 billion per year) and additional revenue will be earned if a similar fee is charged for natural gas. Every dollar collected by the United States is a dollar that Russia cannot fund the war.

Ideally, the policy would be negotiated with Russia, where it would be evacuated as part of a deal. If not, the U.S. will still collect billions of dollars a year, which could help President Trump’s proposed tax cuts. In this case, Russia will effectively help repay the loan U.S. taxes are used to provide aid to Ukraine to defend itself from Russian attacks.

Over the past three years, Western sanctions and public outcry, including some dock workers’ refusal to unload Russian tankers, forcing Russia to find new buyers and sell new buyers at discounted prices worldwide and oil at discounted prices. Oil discounts averaged about $9 per barrel over the past 12 months, and $35 per barrel in April 2022. Although Russia’s oil prices are low, Russia still maintains exports, ensuring a stable supply to the global oil market.

By imposing secondary sanctions, the United States will cut revenues unless universal Russian tariffs are paid, effectively increasing discounts on Russian oil. Russia’s continued exports, despite facing huge discounts over the past three years, show that it will continue to export the same quantity. This will keep global oil supply stable and help control oil prices. Russia’s oil and gas production is cheap and depends to a large extent on the revenue they generate, so it has no choice even at a lower price, but can continue to sell.

Although Mr. Trump can adopt this strategy, Congress can strengthen his negotiating stance by passing a bill that will bring universal Russian tariffs to the status quo on its own. This will allow the president to blame the measure on Congress to protect his communication with Mr. Putin. He will also determine whether and when he wants to sign the bill, giving him additional Russian leverage. Discussions on such bills may help push the Kremlin toward a peace agreement.

Combining secondary sanctions is a powerful tool in the U.S. economic suite and receives the fees for tariffs that could put pressure on Mr. Putin by threatening his most valuable source of income. It will also make it easier for President Trump to fulfill his promise for lasting peace.

Glenn Hubbard, former chairman of the Economic Advisory Council, is Russell L. Carson professor of finance and economics at Columbia University. Catherine Wolfram is the deputy secretary of the Treasury Climate and Energy and is William Button Rogers Professor of Energy Economics at the MIT Sloan School of Management.

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