Another day, another country targeted by US president Donald Trump who is on a tariff spree.
Today it was India’s turn which Trump lambasted for its dealings with Russia.
The US president announced that imports from India will attract 25% tariffs from August 1, “plus a penalty”, citing India’s purchases of energy and military equipment from Russia, its high tariffs, and its “strenuous and obnoxious” non-monetary barriers to trade.
“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country,” Mr. Trump wrote on the social media platform Truth Social.
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“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST [sic],” he added.
Figures compiled by Washington show the US trade in goods with India were an estimated $129.2bn (£97bn) in 2024, making it the US’s 10th largest trading partner. The US goods trade deficit was worth $45.7bn.
Frustration with Putin
Trump is targeting India partly because of his frustration with Russian premier Vladimir Putin as the duo haven’t been able to see eye to eye in ending the war in Ukraine.
Trump had claimed before his inauguration in January that he would be able to end the conflict within 24 hours of taking office.
Trump said Tuesday that Russia must agree to a ceasefire in Ukraine by Aug. 8 or risk sanctions, accelerating a deadline that was previously up in the air.
The US president in July set a 50-day deadline for the agreement with Ukraine, threatening tariffs if a deal was not made. On Monday, during his meeting with UK Prime Minister Keir Starmer, he said he was shortening this deadline to “10 or 12 days.”
Website Politico reported that on his way back to the United States, Trump said the clock was ticking and it was “10 days from today.”
“And then we’re going to put on tariffs,” Trump added while aboard Air Force One on Tuesday, “and I don’t know if it’s going to affect Russia, because he wants to, obviously, probably keep the war going.”
“We get a lot of bullshit thrown at us by Putin, if you want to know the truth,” Trump said at a Cabinet meeting in July. “He’s very nice all the time, but it turns out to be meaningless.”
Retaliation fears
Indian prime minister Narendra Modi is not known to mince his words and is widely expected to introduce retaliatory measures against steep tariffs imposed by Trump.
Dan Coatsworth, investment analyst at AJ Bell, said: “On his return to the White House in January, Donald Trump promised lower taxes, more jobs, a clampdown on immigration, and a new trade policy that would see the US become less reliant on overseas-supplied goods.
“Six months on, the US president has had quite an impact on businesses, consumers and financial markets, some positive and some negative.
“It’s been a whirlwind period and people are still trying to fathom the longer-term implications of his policies.
“The ‘Big, Beautiful Bill’ has been signed into law and made permanent Trump’s 2017 tax cuts and paved the way for extra spending in defence and immigration while cutting funding for health and accelerating the phasing out of clean energy tax credits.”
India has already reduced tariffs on a range of goods – including Bourbon whiskey and motorcycles – but the US continues to run a $45bn (£33bn) trade deficit with India, which Trump is keen to reduce.
“A multitude of foreign trade partners are in talks with the Trump administration, hoping to get a framework agreement by 1 August. The more Trump extends the deadline, the weaker his bargaining power to get a deal weighted in the US’s favour as trade partners could push for more time to negotiate. The message from the White House is that Trump is not in a rush to secure deals before the deadline, instead preferring to get each agreement right,” Coatsworth added.
“Any deal that is higher than the 10% baseline tariff and less than the original Liberation Day tariff could be deemed a win by the foreign trade partner, whereas the US could be in a better position regardless of the final rate so Trump would still have something upon which to claim victory.
“While the lacklustre response to recent tariff news might imply investors are cool as a cucumber towards trade talks, there has been a wake-up call in recent days.”
