WASHINGTON: Former U.S. President Donald Trump has announced a 25% tariff on India, set to take effect from August 1, along with a proposed penalty over India’s ongoing trade and military ties with Russia. The move, revealed on Truth Social, marks a significant escalation in Trump’s economic strategy toward India, a nation he called a “friend with unfair trade policies”.
While slightly lower than the earlier proposed 26% tariff unveiled on what Trump dubbed “Liberation Day,” the new 25% rate remains among the highest levied on India. Trump criticised India’s high tariff structures and what he called “non-monetary trade barriers,” branding them as among the world’s most restrictive.
Trump also highlighted India’s continued purchase of Russian military equipment and energy, accusing the country of supporting Moscow during a time when global sentiment urges Russia to end the Ukraine conflict. “India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August first,” Trump declared in a capitalised statement.
The specifics of the penalty remain unclear, as the White House has not released further details. Trump’s announcement is also tied to his broader tariff plans aimed at reducing America’s trade deficit, especially with countries he accuses of exploiting U.S. markets.
Economists, however, argue that such tariff regimes often backfire, as they could lead to higher prices for consumers and strain international relations. Trump has previously suggested imposing 100% tariffs on countries that continue importing Russian oil and gas without a ceasefire agreement between Russia and Ukraine.
If enacted, these penalties could significantly impact nations like India, China, and Brazil, all of which rely heavily on Russian energy. The potential for economic disruption remains high as Trump intensifies his trade war rhetoric ahead of the 2024 U.S. presidential elections.
-Agencies
