Trump announces 25% tariff on India plus penalties for buying Russian energy
He added that India buys military equipment and oil from Russia, which Mr Trump said has enabled the war in Ukraine.
As a result, he intends to charge an additional 'penalty' starting on Friday as part of revised tariffs on multiple countries.
The announcement came after a series of negotiated trade frameworks with the European Union, Japan, the Philippines and Indonesia — all of which Mr Trump said would open markets for American goods while enabling the US to raise tax rates on imports.
The president views tariff revenues as a way to help offset the budget deficit increases tied to his recent income tax cuts and generate more domestic factory jobs.
While he has effectively wielded tariffs as a cudgel to reset the terms of trade, the economic impact is uncertain as most economists expect a slowdown in US growth and greater inflationary pressures as the costs of the taxes are passed along to domestic businesses and consumers.
At a population exceeding 1.4 billion people, India is the world's largest country and a possible geopolitical counterbalance to China.
India and Russia have close relations, and New Delhi has not supported western sanctions on Moscow over its war in Ukraine.
When Mr Trump met Indian Prime Minister Narendra Modi in February, the US president said India would start buying American oil and natural gas.
He discussed his policies on trade and tariffs with reporters accompanying him on Tuesday on the flight home after a five-day visit to Scotland.
He declined to comment then about reports that India was bracing for a US tariff rate of at least 25%, saying: 'We're going to see.'
Mr Trump also said the outlines of a trade agreement with India had not yet been finalised.
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Compared to 14 years of Tory corruption and chaos, they are paragons of efficiency. Inkling
Reuters
an hour ago
- Reuters
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ZURICH, Aug 4 (Reuters) - Switzerland is ready to make a "more attractive offer" in trade talks with Washington, its government said on Monday, following a crisis meeting aimed at averting a 39% U.S. import tariff on Swiss goods that threatens to hammer its export-driven economy. The Federal Council - the country's governing cabinet - said it was determined to pursue discussions with the United States, if necessary beyond the August 7 deadline that U.S. President Donald Trump has set for the tariff to come into effect. "Switzerland enters this new phase ready to present a more attractive offer, taking U.S. concerns into account and seeking to ease the current tariff situation," it said in a statement. The statement said it was committed to securing fair treatment compared with its primary trading competitors, but did not give any details on what the Swiss government may offer. It was not currently considering any countermeasures, it added. Switzerland was left stunned on Friday after Trump hit it with one of the highest tariffs in his global trade reset, with industry associations warning that tens of thousands of jobs were at risk. The duties are scheduled to go into effect on Thursday, giving Switzerland, which counts the U.S. as its top export market for pharmaceuticals, watches, machinery and chocolates, a small window to strike a better deal. The government declined to comment on whether Swiss President Karin Keller-Sutter would travel to Washington for more talks, as called for by some, including Nick Hayek, CEO of flagship Swiss watchmaker Swatch (UHR.S), opens new tab. The White House said on Friday it decided on the 39% import duty because of what it called Switzerland's refusal to make "meaningful concessions" by dropping trade barriers, calling the two nations' current trade relationship "one-sided". Swiss industry leaders and politicians, however, have struggled to understand why the country was singled out. Monday's statement pointed out that bilateral trade between the two nations has quadrupled in the past two decades, and Switzerland is now the sixth-largest investor in the United States. "Switzerland unilaterally scrapped all tariffs on industrial goods as of 1 January 2024, meaning over 99% of U.S. goods enter Switzerland tariff-free," it said. Trump has stated he wants to rebalance global trade, claiming that current trade relations are stacked against the United States and are responsible for a $1.2 trillion U.S. goods trade deficit. Switzerland had a 38.5 billion Swiss franc ($48 billion) trade surplus with the U.S. last year. "The president (Trump) is really focused on the trade deficit, because he thinks that this is a loss for the United States," President Keller-Sutter told Reuters on Friday. Bern's statement on Monday said the new tariff rate would apply to nearly 60% of Swiss exports to the U.S. and "puts Switzerland at a distinct disadvantage compared with other trading partners with similar economic profiles". The EU, Japan and South Korea, which have negotiated 15% tariff rates with Washington, all have larger trade surpluses with the U.S. - around $235 billion for the EU, $70 billion for Japan, and a nearly $56 billion surplus for South Korea. Swiss Business Minister Guy Parmelin, who over the weekend said the government was open to revising its offer, said options included Switzerland buying U.S. liquefied natural gas or further investments by Swiss companies in the United States. While the government appears focused on proposing a more enticing deal to Washington, some Swiss politicians have pushed for retaliation, including calls to scrap 6-billion-franc deal to buy F-35A Lightning II fighter jets from the United States. The new tariff rate - up from an originally proposed 31% tariff that Swiss officials had already described as "incomprehensible" - would deal a major blow to Switzerland's economy. Swiss economic output would be reduced by 0.3% to 0.6% if the 39% tariff was imposed, said Hans Gersbach, an economist at ETH, a university in Zurich. That figure could rise above 0.7% if pharmaceuticals, which are currently not covered by the U.S. import duties, are included. Prolonged disruptions could shrink Swiss GDP by more than 1%, Gersbach said. The tariffs could also see the Swiss National Bank cut interest rates in September, according to Nomura. An index of Swiss blue-chip stocks (.SSMI), opens new tab was down 0.4% on the day, lagging the broader regional STOXX 600 index (.STOXX), opens new tab, which rose 0.8%. In Zurich, shares in high-end watchmakers such as Richemont (CFR.S), opens new tab and Swatch fell in volatile trading. Richemont stock was last down 1.5%, having dropped as much as 3.5% earlier, while Swatch shares were down 1.8%, having fallen by as much as 5%. On Monday, the Swiss franc was the worst-performing major currency against the dollar, which was last up 0.4% at 0.8073 francs, not far off Friday's one-month highs. ($1 = 0.8088 Swiss francs)
