In a pivotal moment ahead of President Trump's anticipated encounter with President Putin, U.S. Treasury Secretary Scott Bessent hinted at the potential for increasing tariffs on India contingent on the diplomatic discussions about the ongoing Ukraine conflict.
US Prepares for Trade Showdown with India as Trump-Putin Talks Loom
US Prepares for Trade Showdown with India as Trump-Putin Talks Loom
As U.S. tariffs on India threaten to escalate, the outcome of a high-stakes meeting between Trump and Putin could determine how relations unfold.
U.S. Treasury Secretary Scott Bessent has warned that the United States may impose further tariffs on India, contingent upon the results of a crucial meeting between President Donald Trump and Russian President Vladimir Putin slated for Friday in Alaska. Bessent stated, "We've put secondary tariffs on Indians for buying Russian oil. If things don't go well, then sanctions or secondary tariffs could go up," during an interview on Bloomberg TV.
The meeting comes at a critical juncture as Trump seeks to mediate a ceasefire between Russia and Ukraine, which has raised tensions in international trade relations. Just this month, the U.S. imposed an initial 25% tariff on India for its purchases of weapons and oil from Russia, further straining bilateral ties.
The U.S. has attributed Delhi's increased reliance on Russian oil—accounting for nearly 40% of India's imports in 2024—to the ongoing conflict, a move that has not sat well with Washington's officials. In reference to the Europeans’ involvement, Bessent criticized them for not supporting U.S. sanctions sufficiently, suggesting a united front is necessary.
Despite the U.S. pressures, India defends its oil purchases, emphasizing the need to source cheaper crude to shield its population from rising energy costs. The fraying trade relations have been complicated by India's hesitance to adjust tariffs on agriculture and dairy products, which has become a sticking point in ongoing negotiations.
Trump has accused India of being a "tariff abuser" and expressed a desire to narrow the significant $45 billion trade deficit. The anticipated increase of tariffs to 50% effective August 27 poses grave implications for a range of Indian industries reliant on exports. Analysts warn this escalation could result in a downturn of India's growth by up to half a percent, intensifying the stakes ahead of the crucial Trump-Putin dialogue.
