Trump plans to impose a Russia ‘penalty' on India in addition to a 25 percent tariff as trade talks stall

RNZ News

2 days ago

By
Phil Mattingly
and
Kit Maher
, CNN
US President Donald Trump doubled down on a threat to impose 25 percent tariffs on all Indian imports.
Photo:
AFP / Pool / Christopher Furlong
US President Donald Trump is ratcheting up the pressure on India, calling into question the prospects of a deal with a key US trading partner just days before his tariff deadline.
Trump, in a pair of social media posts Wednesday, sharply attacked India's trade barriers and directly targeted India's sustained reliance on Russian oil purchases and military equipment. He doubled down on his threat to impose 25 percent tariffs on all Indian imports and threatened an additional "penalty" in response to India's energy purchases.
"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," Trump wrote on Truth Social.
"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!"
Trump's tariff escalation comes on the heels of a series of deals with major US trading partners that have set a rough baseline of between 15 percent and 20 percent and included a series of pledges to expand market access for US products and foreign investment commitments.
For India, it marks a major setback in a months-long effort to secure a deal that officials believed on several occasions was nearing the finish line.
Top trade officials have been transiting back and forth between the Washington and New Delhi for months in pursuit of a final agreement. But the recent trade agreements with Japan and the European Union have emboldened Trump in the final days before the August 1 deadline for the administration's paused "reciprocal" tariffs to snap back into place, officials say.
Trump's ability to secure commitments on market access for US producers has become a particularly salient fixation as Trump has reviewed draft offers in recent days, the officials said. That has created a significant obstacle to the prospects of an agreement with India, one official told CNN.
"They're willing to go part of the way," the official said. "But the president isn't in a 'part of the way' mood - he wants barriers removed completely or as close to completely as possible."
Trump's approach is tied in part to a strategy that has become increasingly apparent to foreign trade officials involved in late-stage talks: Trump has no qualms about letting those higher tariffs go into place - a message he's delivered repeatedly in public over the last several weeks.
But it's also created an environment in which Trump has embraced a clear sense of leverage over trading partners - even close allies - who are desperate to maintain access to the world's largest consumer market.
"I think President Trump is frustrated with the progress we've made with India but feels that a 25 percetn rariff will address and remedy the situation in a way that's good for the American people," Director of the National Economic Council Kevin Hassett said at the White House on Wednesday.
The tariffs on India, Hassett said, might cause them to "reconsider their practices."
"Over time, I would guess that Indian firms will be onshoring production in the US, and Indians might even open their markets more to us so that we reconsider our future trades," Hassett added.
At the same time, Trump has escalated in parallel his threat to impose secondary sanctions on Russian energy exports in response to Russian President Vladimir Putin's refusal to de-escalate attacks on Ukraine.
That dynamic, which has long been weighed across successive administrations, would directly impact India and China most as nations who purchase the bulk of Russian energy products.
India's oil imports from Russia have ticked up this year as Russia continued to be the top supplier to the world's most populous nation. Russia for roughly 35 percent of India's overall supplies, followed by Iraq, Saudi Arabia, and United Arab Emirates.
CNN has reached out to the White House for more information on what the penalty will be and if India will be receiving an official letter from the United States marking the tariff, as other nations have received.
On Tuesday, Trump told reporters that India would pay 25 percent tariffs if they don't reach a deal by August 1.
When imposing a 50-day deadline on Russia to reach a ceasefire earlier this month, Trump announced that countries that purchase Russian oil would face secondary sanctions. That ceasefire deadline has since moved to August 8.
Trump officials have been privately making clear to counterparts that Trump's threat to significantly escalate an already sweeping US sanctions regime on Russia should be taken seriously and is not a negotiating ploy, the officials said.
Treasury Secretary Scott Bessent said Tuesday he shared that message directly with his Chinese counterparts during trade talks in Stockholm.
"I think anyone who buys sanctioned Russian oil should be ready for this," Bessent told reporters at a news conference at the conclusion of the talks.
According to an analysis of Russian fossil fuel exports and sanctions conducted by the Centre for Research on Energy and Clean Air in June, India continued to be the second-largest buyer of Russian fossil fuels behind China.
- CNN