Donald Trump's 25% additional tariff on India: What are ‘secondary tariffs' and how do they differ from ‘secondary sanctions'? Explained
US President Donald Trump has announced a secondary or additional tariff on India for its crude oil trade with Russia. During his second presidential term, Donald Trump has wielded tariffs extensively to achieve various objectives: from enhancing domestic production and securing foreign market entry to raising federal income, and even retaliating against Brazil's prosecution of his political associate, former President Jair Bolsonaro.
On August 6, Trump declared the implementation of a 'secondary tariff' on Indian imports to the US, scheduled to be effective in 21 days, that is August 27 onwards. The measure imposes an extra 25% duty on Indian goods, supplementing the existing 25% tariff, specifically to penalise India's oil purchases from Russia.
What are Trump's
secondary tariffs
?
Trump's latest initiative introduces what he terms a "secondary tariff", aimed at pressuring countries to sever ties with US opponents - in this case Russia.
The fundamental principle of "secondary tariffs" involves using trade penalties against one country to exert pressure or influence upon another country. This approach shares similarities with secondary sanctions mechanisms, according to a Bloomberg report.
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'Extremely unfortunate': India reacts strongly to Donald Trump's 25% additional tariff for buying Russian oil; 'will take all actions necessary…'
How are secondary tariffs different from secondary sanctions?
Secondary sanctions basically serve as a US policy tool to enhance the impact of primary sanctions imposed on specific entities or nations.
These sanctions specifically address business activities with sanctioned parties that occur beyond US jurisdictional boundaries.
The objective is to present organisations, financial institutions and persons with a decisive choice: either maintain business relations with the sanctioned entity or continue operations with the US, as both options cannot coexist.
Secondary sanctions derive their effectiveness from the dominant position of the US financial system in global economics and the dollar's status as the international reserve currency, rather than through direct asset seizures or fines like primary sanctions.
Entities breaching secondary sanctions risk facing US export restrictions or inclusion in the Treasury Department's Specially Designated Nationals and Blocked Persons List, effectively barring them from American business dealings.
Secondary tariffs differ from secondary sanctions - the additional 25% duty Trump announced on Indian imports is not designed to enhance an existing primary tariff, despite what its name might indicate, the Bloomberg report said.
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Whilst US tariffs on Russian energy became redundant following the 2022 ban after Russia's war with Ukraine, this new levy on Indian goods appears intended to pressure India's government to implement a comparable ban, ultimately aiming to influence Russia to cease its military operations.
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Donald Trump hits India with highest 50% tariff for Russia crude oil buys - how will it impact Indian economy? Explained
In March, Trump announced a system to levy tariffs on imports from nations purchasing Venezuelan oil, which he claimed endangers US national security.
And how does the US track which countries are buying oil from Russia? Maritime vessels are equipped with tracking transponders that broadcast their positions continuously. These signals can be monitored via satellite in real time.
This technology enables both governmental and private analysts to observe oil tankers' movements, such as tracking vessels from their loading points in Russia to their discharge locations in India.
India sources around 88% of its crude oil needs from global markets, which is then refined into various fuels including petrol and diesel. Before 2021, Russian crude made up just 0.2% of India's total oil imports.
After the Russia-Ukraine conflict began, Indian refineries capitalised on Russian oil offerings at reduced prices, which were available at competitive rates due to western-imposed sanctions. At present, Russia has become India's leading supplier of crude oil.
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Indian Express
5 minutes ago
- Indian Express
Tavleen Singh writes: Reform, reform, reform
From the moment that Donald Trump threw his tariff tantrum last week, a mood of gloomy patriotism started to spread across our ancient land. Debates on television became populated with angry panelists calling Trump a bully and an imperialist, and reminded him that India is a sovereign country that will not kowtow as we did when we depended on handouts of American grain to feed our 'starving millions'. Comparisons with the East India Company's brutal trading practices were invoked and influencers on social media wrapped themselves in the national flag and posted podcasts asserting that we are economically strong enough to withstand the 50% tariff that the American President has imposed on Indian imports. The Prime Minister made a speech the day after Trump's announcement in which he said that he would never betray our farmers. I am not sure why he made this about farmers and not Russian oil, but I am glad he did because it gives me a chance to urge him to bring about reforms that would make it easier for our farmers to compete in international markets. I know that farming reforms is a tricky subject because of the year-long agitation against his earlier attempts to reform agriculture, but let him keep in mind that farmers opposed those farm laws because they believed they would have helped corporations and not farmers. If a fresh attempt began with massive investment in cold storage chains that would help farmers prevent more than 70 per cent of fruit, flowers and vegetables from dying in the fields, it is hard to believe farmers would protest. Last time, the Prime Minister was misled by urban 'experts' who said he should ignore the protests because the only farmers protesting were 'rich' Punjabi farmers. The Russian word kulak was carelessly thrown around, ignoring the sad truth that only 20 per cent of Indian farmers grow enough food to sell in markets. Thanks to those well-meant but mistaken land reforms in Nehruvian socialist times, nearly 90 per cent of our farmers barely grow enough to feed their families. The stabbing in the back that Modi's ex-best friend has done could be turned into an opportunity to bring reforms in other sectors as well. Is the Prime Minister aware that the multi-layered GST (Goods and Services Tax) has destroyed many small businesses? They simply cannot afford to employ a consultant to explain to them the devious nuances that this supposedly simple tax contains. One example will suffice. If you are exporting chairs, there should be a fixed rate. Right? Wrong. If the chair has a cushioned seat, it gets transferred to another category. The tax has unleashed an inspector raj that rivals in ugly ways the old license raj. Modi seems to rely on bureaucrats a little too much, without noticing that this breed of Indian is interested much more in the perks and privileges of his job than in making it easier for businessmen to do business. Let us not delude ourselves into believing that it has become easier to do business in India than it used to be. It has not for a whole litany of reasons. Hiring and firing workers requires government permission for businesses that employ more than 300 people. The bankruptcy law seems designed to punish businesses that have gone bankrupt instead of helping revive them as is the case in more advanced countries. And, most important of all, why has there been no attempt at all to reform our decrepit justice system? It takes decades for rapists, murderers and terrorists to be brought to justice. Reform is not complicated, as a lawyer friend explained to me. To rid us of the horrendous backlog in our courts, he suggested a time limit for getting rid of old cases, and time limits on the length of trials and the disposal of appeals. He also suggested younger judges at the top. Another area in which urgent reforms are needed is urban planning. Last week we were reminded horribly that because of unplanned urbanisation in the Himalayas, whole villages and towns were swept away by the angry waters of the Bhagirathi. This happens every year. In the Prime Minister's own constituency, we watch as Varanasi turns into Venice annually when the rains come. Most cities share this fate, so they drown in dirty water and garbage in the monsoon, and north India becomes a gas chamber in winter. Modi reminds us often that under his leadership the Indian economy has gone from being number 11 in the world to number four and will soon be number three. It is a happy thought but let us not delude ourselves. If more than 80 per cent of our population needs subsidised food every month, it should be clear that we are not on the verge of mass prosperity. My point is that Modi should view this betrayal by his ex-best friend as a boon and not a catastrophe. It gives him a chance to go back to his old slogan, which I think went 'reform, perform, transform'. As for Trump and his insane trade war against India, will somebody remind him that this is the most pro-America country in the world. At least it used to be till last week. Hard to say if this will still be true by the end of this month if he goes ahead with his plan to impose that 50 per cent tariff on Indian imports.
Indian Express
5 minutes ago
- Indian Express
History Headline: Shibu Soren and the moral arc of the republic
On August 4, Shibu Soren, 81, fondly called Dishom Guru (leader of the land), breathed his last. Born in 1945 in Nemra village in present-day Jharkhand's Ramgarh district, a centre for coal mining, at a young age, Soren was entrusted with the responsibility of demanding justice for the tribes in the Chotanagpur plateau. Witnessing local moneylenders murder his father and seeing an abysmal future for these tribes, he became a fighter for their cause. But that journey was easier said than done. Post-independence, the advent of state enterprises in the mining and industrial sectors transformed the central Indian hinterland, particularly the socio-economic fabric of the Chotanagpur plateau. While capital and technology came from outside, the tribals living there, who were supposed to benefit from this development, were squeezed out of their land and resources. Compensation, if it ever reached them, dried up and jobs, even when promised, rarely came their way. Anthropologist L P Vidyarthi noted in the early 1960s that these tribes were reduced to alcoholism and became absentee manual labourers in factories established on their lands. It was in these conditions that a new generation of leadership demanded justice for them. Jaipal Singh, an Oxford graduate and captain of the Indian hockey team that won its first gold at the 1928 Olympics, was the first to articulate the cause of tribal development in the 1950s. Singh believed that Jawaharlal Nehru — who had promised development for everyone — was the only friend the tribals had. However, when development came, there was very little place for the tribals in it. After Nehru and Singh, the mantle of tribal leadership fell on Kartik Oraon, Sushil Bage, N E Horo, Justin Richard, Bagun Sumbrui, A K Roy, Binod Bihari Mahto, Nirmal Mahto and others. More than anyone else, it was Soren's political struggles that kept reminding the Republic of its promise to the tribals. He placed the exploitation of the tribes at the centre of his political argument, which, he said, required a political solution. One immediate solution he proposed was political autonomy, which he felt could lead to the economic development of the locals. He believed that a state of their own — 'Jharkhand' — could bring prosperity to the tribals, not just those in Bihar, but also the sections in West Bengal, Odisha and Chhattisgarh. His enormous moral fortitude and political sagacity led to the creation of Jharkhand in 2000. During his struggle for the tribals, Soren forged a bond with two popular leaders from the coal belt, A K Roy, a Marxist labour leader and theoretician, and Binod Bihari Mahto, a lawyer who had helped thousands displaced by the Bokaro Steel Plant and other projects. For Roy and Mahto, politics was a way to fulfil their commitment to the people. This association would help Soren retain his vision's moral clarity. Then there was his baptism of fire in politics. Soren's political life began in the region's mineral and industrial hub, where the mining mafia, and both state and non-state actors, were ready to quash all resistance. But Soren resisted. His efforts against his adversaries led him to organise a team of friends who stuck together due to his moral standing. This art of team building set Soren apart from many other leaders of Jharkhand. Soren, who had completed his matriculation from Gola village, located on the Ramgarh coalfields, came to believe in the efficacy of negotiations. This gave him a reputation among the managers of mines and industries — as someone who only put up the just and legitimate demands of the locals. Soren's ability to talk to those in power with a sense of moral courage allowed him to deal with his political opponents, including Lalu Prasad Yadav, then Bihar Chief Minister, without losing credibility. Located as he was in the heart of the country's mining and industrial corridor — known for violence, thuggery and political funding — Soren demanded an honest share of the resources for his people. This won him the title of Guruji (teacher). Then came the episode when he accepted a bribe on behalf of the Narasimha Rao government. The news made it to the mainstream media but the episode failed to dent his image among his people. Because Soren's signature was not parliamentary give and take, it was his resistance to his people's exploitation. A good communicator, Soren spoke in popular local languages — Bangla, Khorta and Hindi — as they are spoken in the region. His flowing beard made his own tribe, the Santhals, as well as the Mundas, Oraons, Kharias and Hos, and even non-tribal villagers confident that he always fulfilled his promises. As his universe enlarged in the 1990s, so did his appeal among the struggling tribals in the tea gardens of Assam and Bengal. While many see the creation of Jharkhand as his greatest contribution, Soren will be remembered more for the establishment of the tribal cause at the centre of the moral compass of the republic. The writer teaches at JNU. He grew up knowing Shibu Soren and observed his movement from close quarters
Indian Express
5 minutes ago
- Indian Express
Europe stresses need to protect Ukrainian interests ahead of Trump-Putin talks
European leaders welcomed on Saturday US President Donald Trump's plans to meet with Russian President Vladimir Putin on ending the war in Ukraine, while stressing the need to keep pressure on Moscow and protect Ukrainian and European security interests. Trump plans to meet Putin in Alaska on August 15, saying the parties, including Ukrainian President Volodymyr Zelenskyy, were close to a deal that could resolve the three-and-a-half-year conflict. Details of the potential deal have yet to be announced, but Trump said it would involve 'some swapping of territories to the betterment of both'. It could require Ukraine to surrender significant parts of its territory, an outcome Zelenskyy and his European allies say would only encourage Russian aggression. US Vice President JD Vance met British Foreign Secretary David Lammy, and representatives of Ukraine and European allies on Saturday at Chevening House, a country mansion southeast of London, to discuss Trump's push for peace. A joint statement from the French, Italian, German, Polish, British and Finnish leaders and the president of the European Commission welcomed Trump's efforts, while stressing the need to maintain support for Ukraine and pressure on Russia. 'We share the conviction that a diplomatic solution must protect Ukraine's and Europe's vital security interests,' they said. 'We agree that these vital interests include the need for robust and credible security guarantees that enable Ukraine to effectively defend its sovereignty and territorial integrity,' the statement said, while adding: 'The path to peace in Ukraine cannot be decided without Ukraine.' The leaders also said 'they remain committed to the principle that international borders must not be changed by force,' and added: 'The current line of contact should be the starting point of negotiations.' They said negotiations could only take place in the context of a ceasefire or reduction of hostilities. Zelenskyy's chief of staff, Andriy Yermak, who took part in the talks with European leaders and U.S. officials, said Ukraine was grateful for their constructive approach. 'A ceasefire is necessary – but the front line is not a border,' Yermak said on X, reiterating Kyiv's position that it will reject any territorial concessions to Russia. Yermak also thanked Vance for 'respecting all points of views' and his efforts toward a 'reliable peace.' A European official confirmed a counterproposal was put forward by European representatives at the Chevening meeting but declined to provide details. The Wall Street Journal said European officials had presented a counterproposal that included demands that a ceasefire must take place before any other steps are taken and that any territory exchange must be reciprocal, with firm security guarantees. 'You can't start a process by ceding territory in the middle of fighting,' it quoted one European negotiator as saying. A U.S. official said hours-long meetings at Chevening 'produced significant progress toward President Trump's goal of bringing an end to the war in Ukraine, ahead of President Trump and President Putin's upcoming meeting in Alaska.' The White House did not immediately respond when asked about the European counterproposals. British Prime Minister Keir Starmer and French President Emmanuel Macron spoke and pledged to find a 'just and lasting peace' in Ukraine and 'unwavering support' for Zelenskyy while welcoming Trump's efforts to end the fighting, a Downing Street spokesperson said. It was not clear what, if anything, had been agreed at Chevening, but Zelenskyy earlier called the meeting constructive. 'The path to peace for Ukraine should be determined together and only together with Ukraine, this is key principle,' he said in his evening address to Ukrainians. NBC News cited an unnamed U.S. official as saying that the Trump administration was considering inviting Zelenskyy to join the U.S. and Russian presidents at their Alaska meeting. A Trump spokesperson did not immediately respond to a request for comment on this, and Russian and Ukrainian officials could not immediately be reached for comment. Macron stressed the need for Ukraine to play a role in any negotiations. 'Ukraine's future cannot be decided without the Ukrainians, who have been fighting for their freedom and security for over three years now,' he wrote on X after what he said were calls with Zelenskyy, German Chancellor Friedrich Merz and Starmer. 'Europeans will also necessarily be part of the solution, as their own security is at stake.' Zelenskiy has made a flurry of calls with Ukraine's allies since Trump's envoy Steve Witkoff's visit to Moscow on Wednesday which Trump described as having achieved 'great progress'. Ukraine and the European Union have pushed back on proposals that they view as ceding too much to Putin, whose troops invaded Ukraine in February 2022, citing what Moscow called threats to Russia's security from a Ukrainian pivot towards the West. Kyiv and its Western allies say the invasion is an imperial-style land grab. Moscow has previously claimed four Ukrainian regions – Luhansk, Donetsk, Zaporizhzhia and Kherson – as well as the Black Sea peninsula of Crimea, which was annexed in 2014. Russian forces do not fully control all the territory in the four regions and Russia has demanded that Ukraine pull out its troops from the parts that they still control. Ukraine says its troops still have a small foothold in Russia's Kursk region a year after they crossed the border to try to gain leverage in any negotiations. Russia said it had expelled Ukrainian troops from Kursk in April. Tatiana Stanovaya, a senior fellow at the Carnegie Russia Eurasia Center, said the current peace push was the first 'more or less realistic' attempt to stop the war but she remained sceptical about the agreements being implemented. 'There is virtually no doubt that the new commitments could be devastating for Ukraine,' she said. Fierce fighting is raging along the more than 1,000-km (620-mile) front line in eastern and southern Ukraine, where Russian forces hold around a fifth of the country's territory. Russian troops are slowly advancing in Ukraine's east, but their summer offensive has so far failed to achieve a major breakthrough, Ukrainian military analysts say. 'Not a single serviceman will agree to cede territory, to pull out troops from Ukrainian territories,' Olesia Petritska, 51, told Reuters as she gestured to hundreds of small Ukrainian flags in the Kyiv central square commemorating fallen soldiers.
