United States President Donald Trump has announced sweeping and substantial tariffs on India, one of America’s most important trading partners.
In addition to a 25 per cent tariff that is set to go into effect on Thursday (Friday AEST), Trump also announced an additional 25 per cent tariff on India that will go into effect later this month as punishment for importing Russian oil and gas.
Those combined penalties would bring the total tariff on goods imported from the world’s fifth-largest economy to a whopping 50 per cent – among the highest the US charges.
The latest executive order, according to a document posted on the White House website, represents an escalation of his trade battle with New Delhi and his first use of so-called secondary sanctions on countries the US says are fueling Moscow’s war machine.
The order finds India is “currently directly or indirectly importing Russian Federation oil,” and says it is “necessary and appropriate” to apply the new 25 per cent tariff on Indian goods.
The new, Russia-related tariffs will take effect in 21 days, while the already-threatened 25 per cent tariff is set to take effect within days.
“I have received additional information from various senior officials on, among other things, the actions of the Government of the Russian Federation with respect to the situation in Ukraine,” the order notes as rationale for imposing the new duties.
The announcement came hours after Trump’s foreign envoy Steve Witkoff concluded a meeting in Moscow with Russian President Vladimir Putin.
Trump earlier this week threatened India with the new tariffs, saying they were helping Russia wage war in Ukraine.
“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine,” he wrote on social media.
India responded to Trump’s tariff escalation, defending its purchases of Russian oil.
“We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” a statement published by India’s Ministry of External Affairs read.
“It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest,” the statement added.
It also hinted at potential retaliatory tariffs on American goods, saying that “India will take all actions necessary to protect its national interests.”
The impact of 50 per cent tariffs on Indian goods
The US goods trade deficit with India has nearly doubled since Trump’s first term, as India has become a significantly more important American trading partner.
The trade gap widened as both countries roughly doubled the amount of imported goods from one another.
It also came as Trump ramped up tariffs on China, which former President Joe Biden left in place, incentivising American businesses to seek out alternative production locations like India.
Apple, for instance, moved much of its iPhone production to India over the past few years. Smartphones are exempt from both the tariffs set to take effect soon, as well as the additional 25 per cent tariff later this month.
Last year, the US imported $87 billion worth of goods from India, according to Commerce Department data. India imported $42 billion worth of goods from the US.
The top goods the US received from India last year included pharmaceuticals, communications equipment, such as smartphones, and apparel.
Trump has been threatening a separate across-the-board tariff on pharmaceuticals, which would not be stacked on top of the 50 per cent tariff on Indian goods if that indeed takes effect.
Meanwhile, the top American exports to India were various oils and gases, chemicals and aerospace products and parts; were India to slap retaliatory tariffs on American goods, these industries could suffer.
