Treasury Secretary Scott Bessent warned that if negotiations falter, secondary tariffs on India could escalate, adding strain to US-India relations.
US Considers Escalating Tariffs on India Amidst Tensions with Russia
US Considers Escalating Tariffs on India Amidst Tensions with Russia
The US is poised to impose further tariffs on India depending on the outcome of Trump's meeting with Putin this Friday.
In a recent broadcast, US Treasury Secretary Scott Bessent indicated that Washington may implement additional secondary tariffs on India contingent upon the outcome of President Donald Trump’s upcoming meeting with Russian President Vladimir Putin scheduled for Friday in Anchorage, Alaska. Bessent stated that current tensions could lead to increased penalties, particularly following Trump's recent imposition of a punitive 25% tariff on India for purchasing Russian oil and arms.
He warned that further sanctions "could go up" if the peace discussions between Trump and Putin regarding the ongoing Ukraine conflict do not yield positive results.
India's decision to ramp up imports of Russian oil has further complicated its relations with the United States, especially as these imports have drastically rose from just 3% of India's oil acquisition in 2021 to around 35% - 40% by 2024.
Delhi has defended its strategy by emphasizing the necessity to procure the least expensive crude oil available in order to sustain its economy and shield its population from escalating fuel prices.
In previous remarks, Bessent criticized India for being "a bit recalcitrant" during ongoing trade negotiations and called for a united front with Europe concerning sanctions on Russia.
In light of these developments, trade negotiations between India and the US, aimed at addressing a growing $45 billion trade deficit, will recommence, with US negotiators slated to visit India on August 25.
However, experts believe that India's steadfastness against reducing tariffs on agricultural and dairy imports has proven to be a significant hurdle in these negotiations.
Furthermore, Trump’s newly proposed 50% tariff will be enacted on August 27 and has been deemed by some experts to function similarly to an embargo, effectively making India the most heavily taxed trading partner for the US in Asia. This increase in tariffs could severely hinder India's export-driven sectors, such as textiles and jewelry, and may adversely affect its growth by up to half a percentage point.
As the situation develops, all eyes will be on the discussions between Trump and Putin to gauge the future of US-India economic relations.
