Donald Trump announces 25% tariffs on India, slaps penalty over purchase of Russian equipment & energy

US President Donald Trump

US President Donald Trump on Wednesday announced 25% tariffs and an additional penalty against India ahead of the August 1 deadline.

In a post on Truth Social, Trump described India as America's "friend" but added that it will face 25% tariffs plus a penalty for buying Russian military equipment and oil. The US President reiterated that India has among the "highest tariffs in the world".

"Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country," Trump said on his social media platform.

He hit out at India and China for dealing with Moscow at a time when "everyone wants Russia" to stop the war in Ukraine.

"Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!" he said.

He didn't specify how much extra penalty will be imposed over and above the tariffs.

Moments later, Trump posted that US has a massive trade deficit with India. "WE HAVE A MASSIVE TRADE DEFICIT WITH INDIA!!!"

This marks the first use of Trump’s secondary tariffs, part of a broader strategy by the US President to expand trade measures as tools of economic warfare. "This shows how he [Trump] is replacing some of the traditional sanctions tools in the US arsenal with an expanded use of trade measures for economic warfare," the New York Times said in a report.

The announcement comes just a day after the US President hinted that India could face tariffs as high as 25 percent since the proposed trade deal between them is unlikely to be finalised by August 1.

Trump’s reciprocal tariffs will kick in from August targeting nations with whom the US hasn't yet reached a trade deal.

Responding to a question on whether the United States may impose tariffs between 20-25 percent on India, Trump had said, "Yeah, I think so. They (India) are my friend and he (Prime Minister Narendra Modi) is my friend," adding that the trade deal has not been finalised.

"India has charged basically more tariffs than almost any other country....over the years...you just can't do that," Trump said.

Meanwhile, a team of negotiators from the US government is expected to visit New Delhi in the second half of August to hold the next round of talks for the BTA.

The fifth round of talks between the two countries concluded earlier in July in Washington.

The US has brokered trade deals with a few nations and blocs including European Union, Vietnam and Indonesia.