What's a ‘secondary tariff' like the one Trump imposed on India?
WASHINGTON – In his second term as US president, Donald Trump has used tariffs as a blanket solution to pursue a wide range of goals: increasing domestic manufacturing and foreign market access, boosting federal revenue, and even punishing the government of Brazil for prosecuting his political ally, former President Jair Bolsonaro.
Now he's deployed a tool he calls a 'secondary tariff' in an effort to get countries to distance themselves from US adversaries.
On Aug 6, Mr Trump announced that such
a tariff on imports from India would take effect in 21 days. On top of an existing 25 per cent levy on goods from India, he added an additional 25 per cent tariff to penalise India for buying oil from Russia.
What is Trump's concept of 'secondary tariffs'?
The idea behind 'secondary tariffs' is to use a weapon against one country to penalise or try to influence a different country. The concept is similar to the one behind so-called secondary sanctions.
How are 'secondary tariffs' and secondary sanctions different?
The US uses secondary sanctions to multiply the effect of its primary sanctions on countries or entities. Secondary sanctions target commercial activity involving a party under primary sanctions but occurring outside US legal jurisdiction. They are meant to force companies, banks and individuals to make a tough choice: continue doing business with the sanctioned entity or with the US, but not both.
Unlike primary sanctions, which can be enforced by fines and the seizure of US-held assets, secondary sanctions rely on the centrality of the US financial system to the world economy and the widespread use of the dollar as the global reserve currency to work.
A company or individual who violates a secondary sanction could be hit by US export controls or be placed on the Treasury Department's Specially Designated Nationals and Blocked Persons List, which would prevent Americans from doing business with it.
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The 'secondary tariff' Mr Trump announced on imports from India isn't aimed at magnifying the impact of a primary tariff, as the name might suggest. US tariffs on energy from Russia are irrelevant given that such imports were banned in 2022 after the country's full-scale invasion of Ukraine.
Instead, the extra 25 per cent tariff on imports from India appears to be aimed at compelling its government to adopt a similar ban, with the larger goal of pushing Russia to stop its war.
In March, Mr Trump
created a mechanism for imposing tariffs on imports from countries that buy oil from Venezuela, whose regime, he said, poses a threat to US national security.
How can the US know who other countries buy oil from?
Ships on the water have identifying transponders that allow third parties to track their location in real time via satellite. That enables analysts in and out of government to, for example, follow oil tankers loading in Russia and unloading in India. Bloomberg
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Sign up now: Get ST's newsletters delivered to your inbox – As new factories spring up in South-east Asia and elsewhere in a global rejig of supply chains, made-in-China robots that staff production lines and handle logistics are rolling out with them. Shipments of factory robots from China – including robots produced there by foreign manufacturers – have risen every year since the Covid-19 pandemic, nearly tripling in value from 2020 to reach US$1.13 billion (S$1.45 billion) in 2024. Exports for the first half of 2025 hit US$746 million, a year-on-year growth of almost 60 per cent, according to figures from China's General Administration of Customs. The top three destinations were Vietnam, Mexico and Thailand, The Straits Times' calculations show . 'The sharp rise in shipments (to these countries) underscores the ongoing shift of manufacturing capacity away from the mainland,' said Dr Dan Wang, China director at consultancy Eurasia Group in Singapore. 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