Trump to hike India tariffs within 24 hours, eyes pharma and chip duties next
Trump announced a 25 per cent duty on India's exports to the US and has threatened repeatedly to increase that rate to punish the country for buying Russian energy, an effort to pressure Russian President Vladimir Putin to end the war in Ukraine.
'We settled on 25 per cent but I think I'm going to raise that very substantially over the next 24 hours, because they're buying Russian oil,' Trump said on Tuesday (Aug 5) in a CNBC interview. 'They're fuelling the war machine. And if they're going to do that, then I'm not going to be happy.'
Trump has escalated his fight with India over trade, unilaterally imposing a tariff rate after months of negotiations failed to secure a deal. He accused New Delhi of refusing to ease access for American goods and criticising its membership in the Brics group of developing economies.
The US president has also set an Aug 8 deadline for Russia to reach a truce with Ukraine, with the administration threatening so-called secondary sanctions on countries that purchase energy from Moscow. Ukraine's allies say those purchases prop up Putin's war effort.
Trump in the interview said that if energy prices went down it would undercut Putin's ability to continue his invasion of Ukraine – now in its fourth year.
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'If energy goes down low enough, Putin's going to stop killing people,' Trump said. 'If you get energy down another US$10 a barrel, he's going to have no choice, because his economy stinks.'
The Indian government has indicated it intends to continue talks with the US in hopes of securing lower tariffs. It has also called Trump's threat over energy purchases unjustified. India is considering ramping up natural gas purchases from the US and increasing imports of communication equipment and gold.
In the same interview, Trump also said US tariffs on semiconductor and pharmaceutical imports would be announced 'within the next week or so,' as the administration prepares to target key economic sectors in its effort to remake global trade.
'We'll be putting an initially small tariff on pharmaceuticals, but in one year – one and a half years, maximum – it's going to go to 150 per cent and then it's going to go to 250 per cent because we want pharmaceuticals made in our country,' Trump said.
'We're going to be announcing on semiconductors and chips, which is a separate category,' he added.
The Commerce Department has been investigating the semiconductor market since April to set the stage for possible tariffs on an industry that's expected to generate nearly US$700 billion in global sales. Under Trump, the US has already imposed levies on imports of cars and auto parts as well as steel and aluminium.
Levies on imported chips threaten to sharply increase costs for large data centre operators including Microsoft, OpenAI, Meta Platforms and Amazon.com that plan to spend billions of US dollars on purchases of advanced semiconductors needed to propel their artificial intelligence businesses.
The president has also threatened debilitating tariffs on the drug industry in an effort to force manufacturing back to the US. Trump recently demanded major suppliers of medicines drastically cut costs or face additional, unspecified penalties.
The world's largest drugmakers, including Merck and Eli Lilly, operate scores of manufacturing sites across the globe. Nearly 90 per cent of US biotech companies rely on imported components for at least half of their approved products, according to the Biotechnology Innovation Organisation.
The sectoral tariffs on pharmaceuticals, metals and other industries stem from trade investigations that can last about nine months and are imposed on national security grounds under Section 232 of the Trade Expansion Act. It's seen as stronger legal footing than the emergency powers Trump used for his country-specific levies, which face court challenges. Those so-called reciprocal tariffs are slated to go into effect on Thursday. BLOOMBERG
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