‘Europe financing war against itself’: Bessent says as EU, India move to ink ‘mother of all deals’

US accuses Europe over Russian oil

As India and the European Union move closer to concluding the much-anticipated “mother of all deals”, the United States has accused Europe of indirectly funding the “war” against itself by buying refined Russian oil products sourced from India.

US Treasury Secretary Scott Bessent drew a contrast between Washington’s actions and what he described as Europe’s reluctance to take similar punitive steps, arguing that European governments avoided tariffs in order to safeguard trade negotiations with New Delhi.

Bessent said the United States had imposed 25 per cent tariffs on India over its purchase of Russian oil, while European countries had instead moved ahead with a trade agreement with New Delhi.

“We have put 25% tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India. And just to be clear again, the Russian oil goes into India, the refined products come out, and the Europeans buy the refined products. They are financing the war against themselves,” Bessent said in an interview with ABC News.

He added that the Trump administration had taken tougher measures than its European allies to pressure Russia into ending the war in Ukraine. “Trump has worked to negotiate a settlement on the Russia-Ukraine conflict”, Bessent said, arguing that the United States had made far greater sacrifices than Europe.

Bessent’s comments came just days after he claimed that US tariff measures had played a decisive role in sharply curbing India’s purchases of Russian oil.

He said Washington’s decision to levy tariffs on India for buying Russian crude had resulted in a “collapse” in purchases by Indian refineries.

“We put 25% tariffs on India for buying Russian oil, and the Indian purchases by their refineries of Russian oil have collapsed. So that is a success,” Bessent said in an interview with Politico.

According to Bessent, Russian oil accounted for only 2–3 per cent of India’s total oil imports before Moscow’s invasion of Ukraine, but that share rose to 18–19 per cent after the war began, enabling Indian refiners to earn “huge profits”.

He also suggested that the Trump administration could consider lifting the additional 25 per cent tariff imposed over India’s purchase of Russian oil.

“That is a success. The 25% Russian oil tariffs are still on. I would imagine there is a path to take them off now. So that’s a check and a huge success,” he said.

The Trump administration has imposed total tariffs of up to 50 per cent on India, including the additional 25 per cent levy linked specifically to New Delhi’s purchase of Russian oil.

India–EU set to finalise ‘mother of all deals’

Meanwhile, India and the European Union are expected to announce on January 27 the finalisation of an EU–India free trade agreement, with European Commission President Ursula von der Leyen describing it as the “mother of all trade deals”.

Von der Leyen, who is currently in India, was the chief guest at the 77th Republic Day celebrations in New Delhi. Ahead of her visit, she called the proposed pact a “historic” agreement that could significantly reshape economic ties between India and the 27-member European Union.

The European Union is currently India’s largest trading partner, with bilateral goods trade valued at $135 billion in the 2023–24 financial year. Negotiations on the free trade agreement began in 2007, stalled in 2013 and were revived in 2022.

As part of the talks, India is reportedly considering substantial reductions in import duties on cars from the EU, potentially cutting tariffs to 40 per cent from as high as 110 per cent.

Under the proposal, duties on a limited number of high-value imported vehicles would be reduced immediately and lowered further over time, improving market access for European automakers including Volkswagen, Mercedes-Benz and BMW.