The US President said that while India is “our friend,” it imposes strict tariffs on US goods and buys too much of Russian oil.
President Donald Trump has announced 25% tariffs on Indian goods and an unspecified penalty for the purchase of Russian oil and military equipment countries as the never-ending war in Ukraine frustrate the White House.
Trump announced the trade move he said he would take on Friday in his true social account on Wednesday, saying they are necessary to reverse the long-term trade imbalance.
“India is our friend, but over the years we’ve been doing relatively little business with them because their tariffs are too high,” Trump wrote.
The president also accused India of purchasing military equipment and oil from Russia, but he said he made war in Ukraine possible. As a result, he intends to charge an additional “penalty” on Friday as part of the administration’s revised tariff launch in multiple countries.
In a statement on Wednesday, the Indian government said it had been paying attention to Trump’s tariff decision and studying the implications.
The offensive trade policy further complicates the bond between Trump and Indian Prime Minister Narendra Modi. Narendra Modi was warm during his first term as US president, but has since faced challenges with trade and immigration. Modi also denied Trump’s claim that he intervened to resolve a four-day dispute with Pakistan in May, saying India “does not accept mediation.”
In contrast, Pakistan has seen an increase in stock with the Trump administration before and after the conflict with India. In June, Trump hosted Pakistani Army Chief Asim Munier for lunch at the White House. This is the first time the US president has hosted Pakistan’s military chief.
The US announcement also follows a large number of negotiated trade frameworks with the European Union, Japan, the Philippines and Indonesia. Trump has all said it will open a market for US goods, while allowing the US to raise import tax rates. Trump is creating more domestic factory jobs in connection with recent income tax cuts, which he sees as a way to help offset the budget deficit.
Trump effectively equips tariffs as udgeL to reset trade terms, but the economic impact is uncertain. This is because most economists expect a slower US growth and greater inflationary pressure as tax costs are passed on to domestic businesses and consumers.
The Census Bureau reported that the US was operating a $45.8 billion trade imbalance in goods with India last year.
With a population of over 1.4 billion, India is the world’s largest country and is a possible geopolitical offset against China. India and Russia have close ties, and New Delhi does not support Western sanctions on Moscow for the war in Ukraine.
When Trump met with Modi in February, the US president said India would begin purchasing oil and natural gas for us.
Trump discussed his trade and tariff policies with reporters who accompanied him on Tuesday after a five-day visit to Scotland. He declined to comment when asked about reports that India is paying at least 25% US tariff rates, saying, “We’re going to see.”
Trump also said the outline of the trade deal with India has not yet been finalized.
