Trump vows substantial India tariff hike over Russian oil buying
'India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits,' Trump wrote on social media on Monday. 'They don't care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA.'
Trump didn't say by how much he would increase the levy. Last week, he announced a 25% rate on Indian exports — one of the highest of any major economy — and vowed more duties if India continued to buy oil from Russia.
The US president's warning comes ahead of an Aug 8 deadline for Russia to reach a truce with Ukraine, with the administration threatening so-called secondary sanctions on countries that purchase Russian energy. Ukraine's allies view those purchases as helping to prop up Russian leader Vladimir Putin's economy and undercutting pressure on Moscow to end a war that is now in its fourth year.
India has been a top Trump target in the campaign to end the war. Prime Minister Narendra Modi — who previously enjoyed warm relations with Trump — has been defiant, urging Indians to buy local goods and signalling that his country will continue to buy Russian oil.
In a social media post later on Monday, India's Ministry of External Affairs hit out at the European Union and the US for continuing to buy energy and other materials from Russia when 'such trade is not even a national compulsion.' It noted that India began buying oil from Russia because traditional supplies were diverted to Europe after the start of the war, and the US 'encouraged such imports.'
'The targeting of India is unjustified and unreasonable,' the ministry said. 'Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.'
India has morphed into a major buyer of Moscow's crude since the 2022 invasion of Ukraine, spurred on by discounts. On average, the country has been buying Russian crude at a rate of about 1.7 million barrels a day so far this year, according to tanker tracking data compiled by Bloomberg.
India exported about 1.4 million barrels a day of refined fuels in the first half of this year, according to Kpler data compiled by Bloomberg. Diesel or gasoil cargoes made up approximately 40% of total fuel exports, while gasoline and blending components comprised about 30% of the shipments.
Still, it's hard to quantify how much of India's oil exports derive specifically from Russian crude because refiners generally consume an array of barrels and then sell an even wider range of fuels. The EU recently launched a package of sanctions that will ban the purchase of fuel made from Russian crude, but traders are still waiting for the body to detail how the measures would work in practice.
At least four tankers discharged millions of barrels of Russian crude at Indian refineries at the weekend, a sign the closely scrutinised deliveries are continuing as normal.
Any disruption to Indian purchases of Russian oil could force it to look elsewhere for supplies. Last week, the country's largest processor bought several million barrels of crude from the US and United Arab Emirates in sudden large purchases that were set to be delivered relatively quickly, people familiar with the matter said.
Under the president's deadline for Putin to halt the fighting in Ukraine, secondary sanctions targeting buyers of Russian oil could be imposed Friday.
'Secondary sanctions and tariffs against those that are paying for this war — like China, India and Brazil — by buying the oil that Russia is producing, is an obvious next step to try and bring this war to an end,' Matt Whitaker, the US ambassador to NATO, told Bloomberg Television. 'This is really going to hit them where it counts, and that is in their main revenue source, which is the sale of oil to these countries.'
Trade talks
Trump's escalating tariffs stunned India after months of negotiations. The president has intensified his rhetoric against India, assailing its levies and other barriers to US goods. He's also hit out at the nation's energy purchases from Russia and participation in the Brics group of developing economies, in particular over the bloc's consideration of alternatives to the US dollar.
The Indian government has indicated it intends to continue talks with the US in hopes of securing lower tariffs. India is considering ramping up natural gas purchases from the US and increasing imports of communication equipment and gold.
Officials see those moves as helping to narrow India's trade surplus with the US, a key concern for Trump. The US had a trade deficit with India of about $43 billion last year, the 11th largest, according to figures from the International Monetary Fund. But there are numerous sticking points, with Modi reluctant to open up sensitive sectors like agriculture and dairy to the US.
Relations between Modi and Trump have deteriorated in the president's second term. After clashes earlier this year between India and Pakistan, Trump threatened to block access to US markets if the countries did not halt the fighting. Trump has claimed his actions brought peace, a view that has rankled Modi's government.
Pressure on Russia
India has been caught in the middle of Trump's enhanced focus on ending Russia's war in Ukraine. The president vowed to quickly end Russia's invasion but those efforts have been stymied by Putin, who has responded with only maximalist demands for Ukrainian territory and refused face-to-face discussions with Ukrainian President Volodymyr Zelenskiy.
Trump has grown increasingly frustrated with Putin, leading to his latest threats to impose economic penalties on Moscow. He has floated tougher sanctions in the past only to delay action in hopes of preserving negotiations.
Trump told reporters Sunday that special envoy Steve Witkoff would go to Russia this week — on Wednesday or Thursday — for further discussions. Tensions between Washington and Moscow intensified last week when Trump said he had moved two nuclear submarines in response to 'highly provocative statements' from former Russian President Dmitry Medvedev.
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