US President Donald Trump on Wednesday hit Indian goods with an additional 25 per cent tariff, blaming oil ties with Russia. The new duties, set to be enforced from August 28, could lift tariffs on some exports to 50 per cent - one of the steepest rates for a US trade partner.
US media reported on the additional tariff announcement stating how it would complicate the relations between the two countries, that seemed to be “enjoying the friendship” forged by the leaders. The tones and narratives of the publications differed widely, reflecting the broader implications on the India-US ties.
The New York Times led an article with the headline, “India, Once America’s Counterweight to China, Is Now Facing Trump’s Wrath,” stating how the current crisis between the two countries look much bigger than the terms of trade.
The article mentioned how the two countries seemed to be enjoying their friendship until Trump’s shocking announcement over sweeping global tariffs. It cited Prime Minister Narendra Modi’s meeting with Trump in February, where the former described India’s intention to become one of the world’s most advanced economies, with the United States as a partner.
It added that the "onslaught" against India began on July 30, when Trump declared that India's economy was dead. “Until that point, his administration had been angling to reduce India’s trade barriers, but said nothing about its two years of buying Russian oil at a wartime discount,” the article added further.
In another report, NYT mentioned Trump’s move as perhaps the “biggest gamble” in ending the ongoing Russia-Ukraine war. For India, the costs of a damaged relationship may prove to be higher, the report said, highlighting both the aspects of buying and not buying oil from Russia. The higher tariffs could cut India’s more than $86 billion in exports to the United States by half, the report said, citing Global Trade Research Initiative, an Indian research group.
CNN ran a story with the title, “Trump threatens India with 50% tariff as negotiations fizzle and Modi keeps importing Russian oil” – reflecting on the escalation of trade battle between the two nations.
An article by The Associated Press mentioned that Trump’s moves could scramble the economic trajectory of India, which until recently was seen as an alternative to China by American companies looking to relocate their manufacturing.
China also buys oil from Russia, but it was not included in the order signed by the Republican president.
Trump has put 30 per cent tariffs on goods from China, as part of a negotiating period with Beijing – a rate comparatively smaller than the combined import taxes to be levied on New Delhi.
The AP report, quoting a former Indian trade official, said that Trump’s move was hypocritical because China bought more Russian oil than India did last year. “Washington avoids targeting Beijing because of China’s leverage over critical minerals which are vital for US defense and technology,” said Ajay Srivastava.
A report published by Wall Street Journal is titled, “India’s economy faces bumpy road in face of steep Trump tariff”.
In an earlier report, WSJ wrote that India is digging in its heels and resisting pressure from the US to curb purchases of Russian oil, despite threats by President Trump to retaliate by imposing higher tariffs on India.
“India has taken advantage of discounted oil prices from Russia following Moscow’s invasion of Ukraine. By late 2024, India accounted for over one-third of Russia’s oil exports, second only to China at nearly 50%, according to the Observer Research Foundation, an Indian think tank. Before the war, India bought most of its oil from Gulf countries,” the report mentioned.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
