Additional 25% US tariff levy depends on how geopolitical events unfold: Official

Indian Express

2 days ago

Clarity on the next 'negotiating round' with the US, earlier planned for August 25, would emerge 'closer to the date', a senior government official said on Thursday, reaffirming that India and US remain 'engaged' at various levels including at the diplomatic and commercial levels. The official added that the levy of the additional 25 per cent penalty by the US — over and above the 25 per cent reciprocal tariff that is already in effect — would depend on 'how geopolitical developments unfold' over the next few days.
The official said they are going to keep a close watch on the developments around Russian President Vladimir Putin and US President Donald Trump scheduled meeting in Alaska to close a deal to end the Ukraine war.
'If you look at the US tariffs. One set of tariffs have come into force from August 7. Another set of tariffs have been announced and will come into effect on August 27. That has not come into force yet. The additional 25 per cent is not related to trade, it is because of geopolitical issues. Since a lot of geopolitical developments are happening, it [additional tariff] would depend on how geopolitics unfolds in the next 21 days,' the official said.
'Last time when the negotiating team [for the US trade deal] had gone from India, they had decided that in the last week of August there will be another round of talks. We are fully engaged with the US on the trade negotiations..,' the government official said.
For the 'negotiating rounds', the official said that many things are happening in the US. 'Russia, EU, Ukraine are coming. I think closer to the date, which is the end of August, you would be able to know how that round will be progressing,' the official said.
The Indian Express had reported on August 8 that India-US negotiations for a trade agreement have hit a pause after US President Donald Trump dramatically escalated trade tensions between the two countries by doubling tariffs on India to 50 per cent. The arrival of the US trade team is uncertain, as no formal communication has been received by the US side, this paper reported, quoting government officials.
The pause in talks, after months of discussion, had come after New Delhi decided to dig in its heels over market access in the agricultural sector.
Meanwhile, US Treasury Secretary Scott Bessent has warned that the secondary tariffs on India could go up if 'things don't go well' during talks between Trump and Putin in Alaska on Friday.
'I think everyone has been frustrated with President Putin. We expected that he would come to the table in a more fulsome way. It looks like he may be ready to negotiate. And we put secondary tariffs on the Indians for buying Russian oil. I could see, if things don't go well, then sanctions or secondary tariffs could go up,' Bessent said in an interview with Bloomberg on Wednesday.
When asked about China, the main buyer of Russian crude, Bessent said he is 'not going to get ahead of the President, but the President is the best at creating leverage for himself, and he will make it clear to President Putin that all options are on the table.'
On whether sanctions can go up or loosened, Bessent said, 'Sanctions can go up, they can be loosened. They can have a definitive life. They can go on indefinitely. You know, there's this Russian shadow fleet of ships around the world that I think we could crack down on.'
He added that even as Trump is meeting with Putin, the Europeans 'need to join us' and need to be willing to 'put on these secondary sanctions.'
Bessent recalled that at the G7 meeting in Canada this year, when he asked the leaders at the table whether they were willing to put a 200 per cent secondary tariff on China. 'And you know what, everybody wanted to see what kind of shoes they were wearing.' He added that Trump is committed to ending the bloodshed in the Ukraine war. 'It's put up or shut up time. The President is creating his own leverage. We need the Europeans to come in and help create more leverage,' Bessent said.
Responding to the tariffs, the Ministry of External Affairs has said that the targeting of India is unjustified and unreasonable. 'Like any major economy, India will take all necessary measures to safeguard its national interests and economic security,' it said.