Donald Trump says Aug 1 tariff deadline will not be extended as he announces 25pc tariff on India
He also said that he'll impose a 25pc tariff on goods from India, plus an additional import tax because of India's purchasing of Russian oil.
Trump said that India 'is our friend' but its 'Tariffs are far too high' on U.S. goods.
The Republican president added that India buys military equipment and oil from Russia, which he said has enabled the war in Ukraine. As a result, he intends to charge an additional 'penalty' starting on Friday as part of the launch of his administration's revised tariffs on multiple countries.
The announcement comes after a slew of negotiated trade frameworks with the European Union, Japan, the Philippines and Indonesia — all of which Trump said would open markets for American goods while enabling the U.S. 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 Trump 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 U.S. growth and greater inflationary pressures as the costs of the taxes are passed along to domestic businesses and consumers.
The Census Bureau reported that the U.S. ran a $45.8 trade imbalance in goods with India last year, meaning it imported more than it exported.
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 Trump in February met with Indian Prime Minister Narendra Modi, the U.S. president said that India would start buying American oil and natural gas.
Trump discussed his policies on trade and tariffs with reporters accompanying him Tuesday on the flight home following a five-day visit to Scotland. He declined to comment then when asked about reports that India was bracing for a U.S. tariff rate of at least 25pc, saying, 'We're going to see.'
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