Donald Trump is working on establishing a Ukraine victory fund which will be bankrolled by fresh tariffs on China.
The US president instructed Scott Bessent, his treasury secretary, to float the plan to European counterparts ahead of Volodymyr Zelensky’s visit to Washington DC on Friday.
Mr Trump, who previously claimed Mr Zelensky did not “hold the cards” for a military victory, is increasingly losing patience with Vladimir Putin, and his proposal for a Ukraine war shift marks a significant change in his position.
His language was mimicked by Pete Hegseth, the US secretary of defence, who told a meeting of Nato counterparts that the US was prepared to support Kyiv “in ways that only the United States can do” should Russia continue to shun peace talks.
Discussions in Brussels focused on the potential delivery of long-range Tomahawk missiles and funding Ukraine’s armed resistance into a fifth year.
“President Trump has instructed the ambassador and myself to tell our European allies that we would be in favour of whether you would call it a ‘Russian oil tariff’ on China or a ‘Ukrainian victory tariff’ on China,” Mr Bessent told reporters in Washington on Wednesday.
“But our Ukrainian or European allies have to be willing to follow. We will respond if our European partners will join us.”
Scott Bessent says European allies must be willing to support the plan – Kevin Dietsch/2025 Getty Images
The strategy would introduce a 500 per cent levy on imports from China, with the money generated being used on weapons for Ukraine’s military.
The plan is designed to put maximum economic pressure on Putin, whose war machine is reliant on Chinese support, to come to the negotiating tables with Mr Trump and Mr Zelensky.
Diplomatic sources in Washington told The Telegraph that the idea of sanctioning China over its purchases of Russian oil had previously faced roadblocks from European governments.
Beijing has been labelled as a “decisive enabler” of Russia’s war by Nato nations, but many of the alliance’s member states, including Britain, have refused to brand it an enemy.
Denys Shmyhal, Ukraine’s defence minister, told allies on Wednesday that Ukraine would need $120bn to fund another year of armed resistance in 2026.
Discussions at Nato HQ, co-chaired by Britain, focused on how to raise half of that amount, which Mr Shmyhal said would have to come from Kyiv’s supporters.
A second “important issue” was donations of “long range missiles, which our partners have. The name of these missiles, everyone knows, absolutely, widely known,” Mr Shmyhal added.
Shipments of Tomahawk missiles are expected to top the agenda when Mr Zelensky and Mr Trump hold talks at the end of the week.
Tomahawk missiles would give Ukraine greater ability to strike Russian targets deep behind the front line – Ho New/Reuters/Kenneth moll
Asked about Mr Zelensky’s plea for Tomahawk missiles, Mr Trump said on Wednesday that he was considering “other options”.
“They want to go offensive. I’ll make a determination on that, but they would like to go offensive and we’ll have to make a determination,” he told reporters in the Oval Office.
European Nato sources said they were supportive of the move, which would give Ukraine greater ability to strike Russian targets deep behind the front line, but acknowledge the decision lies solely in the hands of the US president.
Mr Shmyhal said the decision could not be taken at the meeting of Nato defence ministers and would have to be sealed between the two presidents on Friday.
If Mr Trump agrees, it is expected that European nations will have to foot the bill for the missiles and training through Nato’s Purl scheme, which delivers US weapons to Kyiv paid for by European governments.
‘Peace through strength’
Without naming the weapon, Mr Hegseth signalled Washington was ready to deliver the “firepower” needed for Ukraine to achieve “peace through strength”.
“If there’s anything we’ve learnt under President Trump it’s the active application of peace through strength. You get peace when you are strong, not when you use strong words or wag your finger. You get it when you have strong and real capabilities that adversaries respect,” he said.
Mr Hegseth later added: “Now, if this war does not end, if there is no path to peace in the short term, then the United States, along with our allies, will take the steps necessary to impose costs on Russia for its continued aggression.
“If we must take this step, the US War Department stands ready to do our part in ways that only the United States can do.”
A building destroyed by Russian strikes in the Donetsk region of Ukraine on Monday – Oleg Petrasiuk/Ukrainian 24th Mechanized brigade
The US is the only country to manufacture and sell Tomahawks to its closest allies around the world.
The US previously hit India with an extra 25 per cent on top of trade tariffs because of its purchase of Russian oil.
On Wednesday, Mr Trump said Narendra Modi, the Indian prime minister, had assured him the country would stop buying fossil fuels from Moscow, a key revenue source for Putin.
“That’s a big stop. Now we’ve got to get China to do the same thing,” the US president added.
Mr Trump has become more vocal in his support for Ukraine in the months since his fruitless talks with Putin in Alaska.
He shocked Mr Zelensky last month by suggesting Kyiv was “in a position to fight and win all of Ukraine back in its original form” after their meeting on the fringes of the United Nations General Assembly.
He was previously adamant that Ukraine would have to cede territory to Russia as the price of any peace deal.
The Trump administration has renewed its efforts to end the war in Ukraine this week after brokering a deal ending the fighting between Israel and Hamas in Gaza.
On Wednesday, the British government sanctioned Russia’s two largest oil companies, Lukoil and Rosneft, and 51 shadow fleet tankers in a new effort to choke off energy revenues that flow into its war chest.
The two companies were considered strategically significant to the Kremlin and are thought to contribute to state revenues that help sustain Putin’s war in Ukraine.
“We are introducing targeted sanctions against the two biggest oil companies in Russia, Lukoil and Rosneft,” Rachel Reeves, the Chancellor, told reporters while on a trip in the United States. “At the same time, we are ramping up pressure on companies in third countries, including India and China, that continue to facilitate getting Russia oil onto global markets.”
Rosneft is Russia’s leading oil producer, accounting for around 40 per cent of the country’s total output, and Lukoil is the second biggest, with the largest foreign exposure among its domestic peers.
