【Text by Observer Net, Xiong Chaoran】Shortly after announcing a 25% tariff on India in late July, US President Trump once again threatened to increase the tariffs. On August 6 local time, Trump signed an executive order, citing India's purchase of Russian energy "directly or indirectly" as a reason for imposing an additional 25% tariff. As a result, the overall tariff rate imposed by the United States on India has reached 50%.
On the same day, the Indian Ministry of Foreign Affairs issued a statement, calling the executive order by Trump "unfair, unjustified and unreasonable." "Our imports are based on market factors, with the overall goal of ensuring the energy security of 1.4 billion people in India. Therefore, it is extremely unfortunate that the US chooses to impose additional tariffs on India, while other countries also act for their own national interests," the statement added. "India will take all necessary actions to protect national interests."
Reuters reported on August 6 local time that a 50% tariff on India is the highest tariff the US imposes on all its trade partners. Analysts pointed out that Trump's move marks the "most serious decline" in US-India relations since he returned to the White House in January this year. These tariffs could disrupt India's access to its largest export market and could hit industries such as textiles, footwear, gems and jewelry — India's exports to the US totaled nearly $87 billion in 2024.
Meanwhile, several Indian media outlets, including "Today's India", cited sources on August 6 local time, stating that Prime Minister Modi plans to visit China from August 31 to September 1, attending the Shanghai Cooperation Organization Tianjin Summit. If it goes ahead, this will be Modi's first visit to China since 2018. Reuters mentioned the related report, pointing out that this indicates that in times of tension with the US, the alliance between India and the US may be readjusted.
This February, Modi and Trump met at the White House. Visual China
On August 6 local time, after several hours of talks between the US and Russia on the Ukraine conflict failed to make progress, Trump signed this executive order.
According to a statement released by the White House, Trump said that the actions and policies of the Russian government continue to pose an "extraordinary threat" to American national security and foreign policy. To respond to the state of emergency caused by the Ukraine conflict, "it is necessary and appropriate to impose an additional ad valorem tariff on India for directly or indirectly importing Russian oil."
Previously, according to an executive order signed by Trump on July 31, the US would begin imposing a 25% tariff on Indian goods exported to the US from August 7. When combined with the newly announced additional tariff, the overall tariff rate for Indian goods exported to the US will reach 50%. The latest statement from the White House said that, except for some exceptions, the new tariff measures will be implemented 21 days after the announcement of the executive order.
In early April this year, after Trump announced so-called "reciprocal tariffs", he once claimed that a trade agreement with India was expected to be quickly reached, but the differences between the two sides on tariffs and non-tariff barriers led to the trade negotiations being stuck. Since then, India's recent imports of Russian oil have become a key target of US criticism.
Responding to the recent continuous tariff threats from the US, the Indian Ministry of Foreign Affairs issued a strong statement on August 4 local time, criticizing the US's accusations as "baseless and unreasonable." "Countries that criticize India are still continuing to trade with Russia," the statement emphasized that India "will take all necessary measures to safeguard national interests and economic security."
This statement from India did not directly name "those countries," but pointed out that the bilateral trade volume between the EU and Russia reached 67.5 billion euros in 2024, and service trade reached 17.2 billion euros in 2023, which is "far higher than the trade volume between India and Russia."
Since the outbreak of the Ukraine conflict, India has significantly increased its purchases of Russian oil. Now, Russia has become India's main oil supplier, accounting for about 35% of India's total supply, compared to less than 1% previously. It is reported that India imports more than 2 million barrels of crude oil per day from Russia.
Reuters pointed out that with five rounds of US-India trade negotiations failing to reach an agreement, and India refusing to cut last year's record high of 52 billion USD in Russian oil imports, Trump made this tariff decision, triggering an escalation of the tariff war. US and Indian officials believe that political miscalculations, missed signals, and mutual resentment have led to the breakdown of trade agreement negotiations between the world's largest economy and the fifth-largest economy, with bilateral trade exceeding 190 billion USD.
Aside from the tariffs already imposed on India, Trump had also threatened on August 14 local time that if a peace agreement on Ukraine was not reached within 50 days (later shortened to 10 days), he would impose "severe tariffs" on Russia — with a tariff rate as high as 100%.
US officials stated that Trump referred to "secondary sanctions" against countries purchasing Russian oil, not tariffs on Russian goods. Since US-Russia trade is minimal, "secondary sanctions" may be the most severe form of sanction, and imposing tariffs on countries like India that purchase Russian oil would have a significant impact on the Russian economy.
Senior researcher Robin Brooks of the Brookings Institution and Vice President of Economics Ben Harris wrote in an analysis report that if "secondary sanctions" caused a 10% decrease in Russian oil exports, it could raise the price of Brent crude oil from the current level of about $71 per barrel by $6, and if it decreased by 20%, it could cause a $11 increase in oil prices.
They wrote: "Either of these scenarios would significantly increase the likelihood of the US and many other global economies entering an economic recession."
On August 5 local time, during an interview with CNBC, Trump downplayed the potential impact of "secondary sanctions" on oil prices, saying, "I'm not worried about the price because our drilling scale is unprecedented."
Regarding the US's so-called "secondary sanctions," Chinese Foreign Ministry spokesperson Lin Jian previously emphasized that China's position on the Ukraine crisis has always been clear. We have always believed that dialogue and negotiation are the only feasible way to resolve the Ukraine crisis. China firmly opposes any illegal unilateral sanctions and long-arm jurisdiction. "There are no winners in a tariff war, and coercion and pressure cannot solve the problem. Hope that all parties can further create an atmosphere and accumulate conditions to promote the political resolution of the Ukraine crisis, and do more things that help to encourage peace and promote dialogue."
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