Trump order imposes additional 25% tariff on goods from India
The move threatens to further complicate U.S.-Indian relations and comes shortly after a Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later this month.
U.S.-India ties are facing their most serious crisis in years after talks with India failed to produce a trade agreement.
The White House move, first signaled by Trump on Monday, follows meetings by Trump's top diplomatic envoy Steve Witkoff in Moscow aimed at pushing Russia to agree to peace in Ukraine.
Trump has threatened higher tariffs on Russia and secondary sanctions on its allies, if Russian President Vladimir Putin does not move to end the war in Ukraine.
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Deals so far Trump has concluded eight framework agreements with the European Union, Japan, Britain, South Korea, Vietnam, Indonesia, Pakistan and the Philippines that impose tariffs on their goods ranging from 10% to 20%. That's well short of the "90 deals in 90 days" administration officials had touted in April, but they account for some 40% of U.S. trade flows. Adding in China, currently saddled with a 30% levy on its goods but likely to win another reprieve from even higher tariffs before an August 12 deadline, would raise that to nearly 54%. Deals aside, many of Trump's tariff actions have been mercurial. On Wednesday he ratcheted up pressure on India, doubling new tariffs on goods from there to 50% from 25% because of its imports of oil from Russia. The same rate is in store for goods from Brazil, after Trump complained about its prosecution of former leader Jair Bolsonaro, a Trump ally. And Switzerland, which Trump had previously praised, is facing 39% tariffs after a conversation between its leader and Trump derailed a deal. Ryan Majerus, a trade lawyer who worked in both the first Trump administration and the Biden government, said what's been announced so far fails to address "longstanding, politically entrenched trade issues" that have bothered U.S. policymakers for decades, and getting there would likely take "months, if not years." He also noted they lack specific enforcement mechanisms for the big investments announced, including $550 billion for Japan and $600 billion for the EU. Promises and risks Critics lit into European Commission President Ursula von der Leyen after she agreed to a 15% tariff during a surprise meeting with Trump during his trip to Scotland last month, while gaining little in return. The deal frustrated winemakers and farmers, who had sought a zero-for-zero tariff. Francois-Xavier Huard, head of France's FNIL national dairy sector federation, said 15% was better than the threatened 30%, but would still cost dairy farmers millions of euros. European experts say von der Leyen's move did avert higher tariffs, calmed tensions with Trump, averting potentially higher duties on semiconductors, pharmaceuticals and cars, while making largely symbolic pledges to buy $750 billion of U.S. strategic goods and invest over $600 billion. Meeting those pledges will fall to individual EU members and companies, and cannot be mandated by Brussels, trade experts and analysts note. U.S. officials insist Trump can re-impose higher tariffs if he believes the EU, Japan or others are not honoring their commitments. But it remains unclear how that would be policed. And history offers a caution. China, with its state-run economy, never met its modest purchase agreements under Trump's Phase 1 U.S.-China trade deal. Holding it to account proved difficult for the subsequent Biden administration. "All of it is untested. The EU, Japan and South Korea are going to have to figure out how to operationalize this," Shaw said. "It's not just government purchases. It's getting the private sector motivated to either make investments or back loans, or to purchase certain commodities." And lastly, the main premise for the tariffs Trump has imposed unilaterally faces legal challenges. His legal team met with stiff questioning during appellate court oral arguments over his novel use of the 1977 International Emergency Economic Powers Act, historically used for sanctioning enemies or freezing their assets, to justify his tariffs. A ruling could come any time and regardless of the outcome seems destined to be settled ultimately by the Supreme Court.
