Economic impacts of US tariffs could give Trump room on oil sanctions: analysts

US President Donald Trump's sweeping new tariffs could give the US more room to apply pressure to countries like Iran, Russia and Venezuela, but they could also hurt the likelihood that other countries will cooperate with US foreign policy goals, analysts and experts say.

"We're seeing this heavy macro hit from the tariffs weighing on stocks, on indexes and oil," Fernando Ferreira, director of geopolitical risk service at Rapidan Energy Group. "And in a way, it does buy the administration some breathing room to be a little bit more hawkish if they need to in their foreign policy against US adversaries."

However, while many have expected China to curtail imports from US-sanctioned countries like Iran, the new tariffs just gave Beijing an incentive to not be helpful, Ferreira said. "While yes, this gives more room to go harder on Iran, it also gives China more incentive to circumvent sanctions."

The new tariffs announced April 2 boost China's tariff rate to 54%.

Trump has also authorized a 25% tariff for countries that buy Venezuelan crude.

The 25% US tariff would hurt most countries more than they would benefit from the oil they could get from Caracas, Ferreira said.

"It is a drop in the bucket, right, what you're getting out of Venezuela," Ferreira said. "And it's certainly not worth a 25% tariff across the board for 1%, 2% of your total imports."

Rachel Ziemba, a senior adviser with Horizon Engage, made a similar point. "The fear of broader tariffs could increase the impact of proposed tariffs on those buying Venezuelan crude," she said.

Reshaped relations

Looking more broadly, the tariffs, changes in the rule of law, and territorial expansion threats will reshape relations with longtime allies and impair collaboration on a range of issues, Ziemba said.

"Many countries and blocks will turn more inward," Ziemba said. "It is also a time of policy and macro uncertainty, which will deter investments and impede long-term planning including potentially the willingness to sign long-term energy or mining contracts," she said.

If weaker growth hits oil prices persistently, the US may see more space to add pressure on oil producers, particularly if OPEC+ continues with its planned production increases, Ziemba said. However, US production could fall too, reducing market flexibility, she said.

Russian production levels would be harder to backfill, Ziemba said. "I think as a result, pressure on Russia could be short-lived or less extensive," she said.

Trump on March 30 threatened to impose within a month a 25%-50% secondary tariff on countries that import Russian oil if President Vladimir Putin blocks a deal to end the conflict in Ukraine.

Lawmakers in the US Senate on April 1 introduced bipartisan legislation that would impose primary and secondary sanctions against Russia if it refuses to engage in good-faith peace negotiations. It would also impose a 500% tariff on imported goods from countries that buy Russian oil, gas, uranium and other products, according to a statement by Senator Kevin Cramer, Republican-North Dakota.

If tariffs have a cooling effect on global economic activity and oil prices drop, US-sanctioned countries could potentially lose more money and be more open to negotiations with Trump, said Ellen Wald, president of Transversal Consulting.

"However, I don't see this as a likely outcome because, at least in the case of Iran and Venezuela, we have seen pretty dire economic conditions in these countries and they don't seem to impact the way the leaders conduct themselves politically or diplomatically," Wald said.

"In the case of Russia, they still make a good amount of money from insurance and transportation of oil, so it's much more difficult to see how a drop in oil prices would impact Russia's geopolitical position," Wald said.