Trump doubles India tariff to 50% to punish Russian oil buying
WASHINGTON: US President Donald Trump imposed an additional 25% tariff on Indian goods over its ongoing purchases of Russian energy, escalating a fight with a key Asian partner on the eve of his broad-based duties taking effect.
Trump signed an executive order setting the new rate, the White House said Wednesday (Aug 6), which will stack on top of a 25% levy on Indian imports Trump announced last week. The higher duty will take effect within 21 days, according to the order.
The iShares MSCI India ETF fell to session lows after Trump's announcement. Oil prices jumped. India's rupee held steady at 87.91 per dollar in the offshore market.
Trump's move came hours after talks between Washington and Moscow over the war in Ukraine failed to yield an immediate breakthrough.
Indian Prime Minister Narendra Modi has said his nation is being unreasonably targeted by the US, defending consumption of Russian oil as necessary to support its economy. That hasn't proven convincing to Trump.
"They're fuelling the war machine. And if they're going to do that, then I'm not going to be happy,' Trump said Tuesday in a CNBC interview.
A spokesperson for India's Ministry of External Affairs on Wednesday called Trump's announcement "unfair, unjustified and unreasonable' and vowed the government "will take all action necessary to protect its national interests.'
Levies on imports from dozens of US trading partners are set to increase starting Thursday, including those from India, which will face the prior 25% charge.
They're the centerpiece of Trump's effort to shrink trade deficits, revive domestic manufacturing and collect revenue for the federal government. The tariffs also carry risks for the global economy, including the prospect of higher costs and broken supply chains.
Ajay Sahai, director general of the Federation of Indian Export Organisations, said the latest move by the US is a "severe setback' for Indian companies as orders already have been on hold and "this additional blow could force exporters to lose long-standing clients.' - Bloomberg
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