US Imposes 25% Tariff on India Starting August 1 Amid Stalled Trade Talks
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In a dramatic announcement, US President Donald J. Trump has declared that India will face a 25% tariff on its exports to the United States starting August 1. This move comes amid ongoing trade negotiations between the two countries that have hit repeated roadblocks, especially on contentious issues like agriculture, dairy, and India’s continued oil imports from Russia.
“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high,” Trump posted. He criticised India’s history of military purchases from Russia and its significant energy trade with Moscow, saying, “India will therefore be paying a tariff of 25%, plus a penalty for the above starting on August 1st.”
Trump has repeatedly expressed his frustration at this imbalance and had labelled India the “tariff king.” In April, he imposed a global baseline tariff of 10% on several countries, including India, and paused additional duties for 90 days to allow for negotiations. That pause expired on July 9 and was extended to August 1, with the hope that India and the US would finalise a so-called “mini trade deal.”
India had shown willingness to open up to select American agricultural products and processed dairy items. However, the final agreement has not materialised due to concerns over phrasing and policy language. The next round of discussions is expected to take place in the second half of August in New Delhi.
“India has always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of energy,” Trump noted, adding that these actions are “not good” at a time when the world is urging Russia to cease military aggression in Ukraine.
Earlier this year, Trump pressed Ukrainian President Volodymyr Zelenskyy to accept a ceasefire deal. Despite partial agreements, a durable peace remains elusive. Additionally, US Senator Lindsey Graham has announced plans to introduce a bill allowing Trump to impose tariffs as high as 500% on countries continuing to buy Russian energy, a move that could have wider implications for nations like India.
The government has yet to officially respond to Trump’s latest tariff announcement. However, officials privately admit that a long-term trade partnership with the US remains vital and that efforts will continue to resolve the outstanding issues in the ongoing mini-deal negotiations.
Trump’s Sharp Message on Trade
Trump made the announcement via his Truth Social account, stating that while India is a friend of the US, trade relations have suffered due to India’s high tariffs and what he described as “strenuous and obnoxious” non-monetary trade barriers.“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high,” Trump posted. He criticised India’s history of military purchases from Russia and its significant energy trade with Moscow, saying, “India will therefore be paying a tariff of 25%, plus a penalty for the above starting on August 1st.”
Background to the Tariff Dispute
Trade tensions between India and the US have been simmering since Trump’s first term in office, but gained renewed urgency this year as the American administration sought to reduce its trade deficits with major partners. India, which exported nearly $77 billion worth of goods to the US in the past year while importing goods worth about $42.1 billion, maintains a $35 billion trade surplus.Trump has repeatedly expressed his frustration at this imbalance and had labelled India the “tariff king.” In April, he imposed a global baseline tariff of 10% on several countries, including India, and paused additional duties for 90 days to allow for negotiations. That pause expired on July 9 and was extended to August 1, with the hope that India and the US would finalise a so-called “mini trade deal.”
Negotiations Falter Over Agriculture and Dairy
The much-anticipated mini-deal has been in the works since Trump visited Washington D.C. in February and met Prime Minister Narendra Modi. While initial progress was made, the negotiations have reportedly stalled over disagreements in the agriculture and dairy sectors.India had shown willingness to open up to select American agricultural products and processed dairy items. However, the final agreement has not materialised due to concerns over phrasing and policy language. The next round of discussions is expected to take place in the second half of August in New Delhi.
Russia-Ukraine War Adds New Pressure
Trump’s announcement also links the tariffs to India’s energy relationship with Russia. India remains one of the largest buyers of Russian oil, purchasing energy worth approximately $56 billion in the 2024-2025 financial year. The US, which has led international sanctions against Russia due to its war in Ukraine, has increasingly voiced displeasure at India’s position.“India has always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of energy,” Trump noted, adding that these actions are “not good” at a time when the world is urging Russia to cease military aggression in Ukraine.
A Broader US Strategy to Pressure Russia
The tariff announcement is seen as part of a larger geopolitical strategy. Trump has repeatedly promised to end the Russia-Ukraine war, claiming during his 2024 campaign that he could achieve a ceasefire within 24 hours of assuming office. However, seven months into his second term, diplomatic progress remains limited.Earlier this year, Trump pressed Ukrainian President Volodymyr Zelenskyy to accept a ceasefire deal. Despite partial agreements, a durable peace remains elusive. Additionally, US Senator Lindsey Graham has announced plans to introduce a bill allowing Trump to impose tariffs as high as 500% on countries continuing to buy Russian energy, a move that could have wider implications for nations like India.
India's Response and Strategic Position
India has reiterated its stance on energy security, emphasising the need to secure affordable and uninterrupted energy supplies to meet domestic demand. New Delhi has also resisted aligning itself too closely with Western sanctions, preferring a more independent and balanced foreign policy approach.The government has yet to officially respond to Trump’s latest tariff announcement. However, officials privately admit that a long-term trade partnership with the US remains vital and that efforts will continue to resolve the outstanding issues in the ongoing mini-deal negotiations.
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