Red carpet for Putin, trade relief for China, penalties on India: Inside Trump's peculiar policy playbook

CNBC

3 hours ago

President Donald Trump is pursuing an unusual strategy — courting Russian President Vladimir Putin, holding fire on Beijing, all the while turning the screws on a close ally: India. Despite India being one of the earliest nations to engage in negotiations with the Trump administration, there is still no sign of it sealing a deal with the U.S. New Delhi is now also staring at a secondary tariff of 25% or a "penalty" for its purchases of Russian oil that is set to come into effect later this month. U.S. Treasury Secretary Scott Bessent on Tuesday escalated criticism against India, accusing it of profiteering from cheap Russian oil imports and threatening to further raise tariffs on Indian goods. "We have planned to up the tariffs on India — these are secondary tariffs for buying the sanctioned Russian oil," Bessent told CNBC on Tuesday. Earlier this week, White House trade advisor Peter Navarro condemned the Asian giant's dependence on Russian oil as "opportunistic" and undermined international efforts to isolate Russia's war economy. "India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs," Navarro said in an op-ed for the Financial Times . By now the world is getting used to the ad-hoc and sometimes contradictory ways in which the Trump administration is pursuing its agenda. Professor at the East Asian Institute at the National University of Singapore Bert Hofman The sharp rhetoric threatens to unravel years of improving ties between Washington and New Delhi — with India saying the U.S. was targeting it unfairly over its Russian oil purchases. "By now the world is getting used to the ad-hoc and sometimes contradictory ways in which the Trump administration is pursuing its agenda," said Bert Hofman, professor at the East Asian Institute at the National University of Singapore. India has emerged as a leading buyer of Russian oil, which has been sold at a discount since some Western nations shunned purchases and imposed restrictions on Russian exports over Moscow's invasion of Ukraine in 2022. It was the second-largest purchaser of Russian oil, importing 1.6 million barrels per day in the first half of this year, up from 50,000 bpd in 2020, though still trailing China's 2 million bpd imports, according to the U.S. Energy Information Administration. Washington has not placed secondary tariffs on China for its Russian oil purchases. India has reiterated that it was the U.S. administration that had asked it to purchase Russian oil to keep the markets calm, while pointing to the European Union and even the U.S.' existing trade with Moscow. The country has taken aim at Washington, saying U.S. continues to import uranium hexafluoride for its nuclear industry, palladium for the electric-vehicle industry, as well as fertilizers and chemicals from Russia. U.S. bilateral trade with Russia in 2024 stood at $5.2 billion, down from nearly $36 billion in 2021, government data showed. Bilateral trade between New Delhi and Moscow reached a record $68.7 billion for the year ended March 2025. In comparison, the European Union's trade with Russia stood at 67.5 billion euros ($78.1 billion) in 2024, while its services trade in 2023 was at 17.2 billion euros, according to European Commission data . "India has been victimized by these pressure tactics that that the Trump administration is trying to carry out. Trump is clearly using tariffs as a pressure tactic against Russia," Michael Kugelman, director of the South Asia Institute at Washington-based think tank Wilson Center, told CNBC's " Squawk Box Asia ." Another factor determining the U.S. approach to India is that Trump feels "aggrieved," over how Modi undercut his bid to claim credit for playing a role in the India-Pakistan ceasefire, Kugelman emphasized. Adding to Trump's grievances is India's "unwillingness to lower barriers" to exports of American agricultural products such as soybeans and corn, Kevin Chen Xian An, associate research fellow at S. Rajaratnam School of International Studies pointed out. Oil trade for ceasefire Trump's true agenda has little to do with Washington's stated goal of curbing Moscow's oil revenues, but extracting leverages from the trading partners, according to several geopolitics experts. "The overarching objective for the Trump administration is to extract concessions from countries to figure out some justification for levying taxes on trade so that the government can fund its tax reductions on American citizens' income," said Drew Thompson, senior fellow at the think-tank RSIS. "It's not based on foreign policy principles [but] on power politics and gaining leverage," Thompson added. Last week, Trump rolled out a red carpet to greet Putin on his first visit to the U.S. in about a decade, sharing a ride with him in the presidential limousine to the venue. While the meeting did not appear to have produced meaningful steps toward a ceasefire in Ukraine — a goal Trump had set ahead of the summit — both leaders described the meeting as "productive." Speaking at the joint news briefing following the talks , Putin reiterated that "for the conflict resolution in Ukraine to be long-term and lasting, all the root causes of the crisis ... must be eliminated; all of Russia's legitimate concerns must be taken into account." Kirill Dmitriev, one of Putin's top negotiators, hailed Monday's talks in Washington as an "important day of diplomacy," emphasizing Moscow's opposition to any short-term ceasefire deal with Ukraine. Trump is trying to "maximize his leverage ... pressuring India, and Russia via India," to get a trade deal with the former and a ceasefire pact with the latter, said Matt Gertken, chief geopolitical and U.S. strategist at BCA Research. These will eventually help boost Republicans' prospects in the upcoming midterm election, Gertken added. Not provoking China While India faces steep tariffs for its purchases of Russian crude, China, which has remained the largest importer of Russian crude, has been spared such levies. Trump said last Friday he was not considering retaliatory tariffs on China for buying Russian oil, but might consider it in two or three weeks. China's purchases of Russian oil have risen to 46% of overall exports from Russia in the first half of this year, from 34% in 2022, according to the U.S. Energy Information Administration, followed by India which imported around 36% of Russia's supplies. When asked about China's role in Russian oil purchases, Bessent suggested that Beijing's imports were less egregious in the eyes of the Trump administration because it had already been a big buyer even before Russia invaded Ukraine. Going soft on China may also reflect Trump's desire not to scuttle a potential high-profile summit with Chinese President Xi Jinping in the coming months and the conclusion of a lasting trade deal, said Stephen Olson, a senior visiting fellow at ISEAS-Yusof Ishak Institute. The secondary tariffs on India may be intended as "a shot across Russia's bow" to show that the U.S. could turn up the pressure by extending similar tariffs to China, if Russia is not more compliant, Olson added. Following weeks of escalating tensions, Beijing and Washington agreed in May to suspend the hefty duties and loosen several punitive measures imposed in April, as both sides continued to work on hammering out a durable deal. Beijing has leveraged its sheer dominance of rare-earth minerals crucial for military and industrial use in its negotiations with Washington, maintaining a tight control on exports of the critical minerals. The relationship with China is complicated, and the Trump administration has not yet come out with "a clear, coherent policy toward China. Sometimes it seems like it wants to compete with China economically. Other times it seems like it wants to reach some type of understanding or a or a detente," Kugelman said.