Senate Bill Would Broaden Russia Sanctions, Dollar Concerns

A new bipartisan bill in the U.S. Senate would significantly expand sanctions against Russia, imposing mandatory penalties on President Vladimir Putin and secondary tariffs on major purchasers of Russian oil — but the legislation has also reignited debate over whether aggressive sanctions could accelerate the erosion of the U.S. dollar’s status as the global reserve currency.

The “Lindsey O. Graham Sanctioning Russia Act of 2026,” named after the late Republican senator who championed the measure, was formally introduced on July 14 with more than 60 co-sponsors — enough to clear a Senate filibuster. The bill has gained renewed momentum following Graham’s sudden death from an aortic dissection on July 11, with lawmakers framing its passage as a tribute to his legacy.

What the Bill Would Do

The legislation, co-sponsored by Sen. Richard Blumenthal (D-CT) and now led by Sens. Roger Wicker (R-MS), Darline Graham (R-SC), and Jeanne Shaheen (D-NH), would impose mandatory sanctions within 30 days on Putin, senior Russian officials, military leaders, state-owned enterprises, financial institutions, and energy projects. It also targets Russia’s “shadow fleet” of aging oil tankers used to circumvent existing restrictions.

Most notably, the bill authorizes secondary tariffs of up to 100% on the top five purchasers of Russian oil and natural gas — a provision aimed primarily at China and India, which have become major buyers of Russian crude since the 2022 invasion of Ukraine. The 100% figure represents a significant reduction from an earlier proposal for blanket 500% tariffs, reflecting months of negotiations with the Trump administration.

Senate Majority Leader John Thune (R-SD), who signed on as a co-sponsor, said the legislation “not only honors our friend and colleague, but will also promote peace by cutting off the funding fueling Russia’s war machine,” as RFE/RL reported.

The Dollar Dilemma

Yet even as the bill advances, critics and some economists warn that the aggressive use of secondary sanctions may carry unintended consequences. The central tension, highlighted by The New York Times, is a paradox: the more the U.S. weaponizes the dollar-based financial system to punish adversaries, the more incentive those adversaries have to build alternatives.

The data underscores the trend. Russia’s dollar reserves plummeted from 41.5% in February 2022 to roughly 15% by September 2024. The dollar’s share of global foreign exchange reserves stood at 56.77% in Q4 2025, according to IMF data — down from over 70% two decades ago. China and Russia now conduct less than half of their bilateral trade in U.S. dollars.

J.P. Morgan research from July 2025 noted that de-dollarization is “most visible in commodity markets, where a large and growing proportion of energy is being priced in non-dollar-denominated contracts.” The BRICS nations have been actively exploring alternative payment systems and reserve currencies, with Russia and China building financial infrastructure designed to bypass the dollar.

Supporters Push Back

Backers of the bill argue that the revenue denial effect on Russia outweighs the long-term de-dollarization risk. Daniel Fried, former U.S. Assistant Secretary of State for Europe and Eurasia, said the energy provisions “may prove a challenge to implement” but that “its passage could do good at the right time: putting pressure on Russia to end the war.”

Sen. Shaheen framed the issue in stark terms: “If the Kremlin is able to fund its war machine through the sale of oil and gas, it’s going to be able to keep going.”

Supporters also point to the revised bill’s built-in flexibility. It includes presidential waiver authority with congressional notification requirements, allowing the administration to avoid the most disruptive outcomes. Exemptions are provided for countries importing less than 15% of Russian natural gas that are taking steps to reduce dependence.

Political Trajectory

The bill’s path forward remains uncertain. While it has more than 60 co-sponsors in the Senate, it faces potential hurdles in the House, where Rep. Gregory Meeks (D-NY), ranking member of the House Foreign Affairs Committee, has called it “not so much a sanctions bill as it is a massive backdoor authority for President Trump to impose more tariffs, including on our European allies.”

The House passed a separate Ukraine aid and sanctions bill in June, meaning the two chambers would need to reconcile their approaches. President Trump has said the bill has “a good chance” of passing but has suggested adding sanctions on Iran and Hezbollah — a move Blumenthal opposes, warning it could derail the carefully negotiated compromise.

What to Watch

As the Senate prepares for a floor vote, several questions remain: Will Thune schedule a vote before the August recess? Can the bill overcome House opposition? And how will China and India — the primary targets of the secondary tariffs — respond?

For now, the legislation represents the most ambitious congressional attempt yet to use economic statecraft to cripple Russia’s war effort. But it also embodies a broader debate about the limits of sanctions power — and whether the tools that make the U.S. economy dominant can be wielded too aggressively, pushing allies and adversaries alike toward a world less dependent on the dollar.