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Nazia Saeed
- U.S. President Donald Trump imposed a 25% tariff on all goods from India, effective August 1, citing high trade barriers and India’s ties with Russia
- India faces a penalty for buying Russian crude oil and military equipment amid escalating tensions over the Russia-Ukraine war
- The tariff imposition is seen as a tactic to force India into a favorable trade agreement with the U.S.
In a surprising move, U.S. President Donald Trump sharply criticized India and Russia’s growing partnership, stating that both countries could “take their dead economies down together.” This statement came just hours after announcing a 25% tariff on all goods imported from India, effective August 1. Trump cited India’s high tariffs as a significant barrier to trade, calling India’s trade policies “most strenuous and obnoxious.”
The U.S. president also announced a penalty targeting India for its purchases of Russian crude oil and military equipment, marking the first penalty of its kind. India has increased its imports of Russian crude from a mere 0.2% before the Russia-Ukraine war to 35-40%, making it the largest buyer of Russian oil after China.
Donald Trump escalate new tariffs and penalties
Trump’s decision to impose tariffs on India came just a day after Indian officials revealed plans for a U.S. trade team to visit in late August to negotiate a deal. This new tariff is seen as a pressure tactic to force India to comply with U.S. demands, especially as the U.S. has secured favorable trade deals with other countries like Japan, the U.K., and the European Union. Trump’s remarks on social media emphasized that India’s tariffs were too high, citing them as one of the “highest in the world.”
While India is considered an ally of the United States, Trump’s administration has long been frustrated by what it sees as unfair trade practices. Despite this, Trump remarked that India’s purchase of military equipment and energy from Russia undermines the global effort to halt Russia’s aggression in Ukraine.
Ongoing trade discussions and strategic partnerships
In addition to the India-focused penalties, Trump discussed a new partnership with Pakistan to develop its oil reserves. He hinted that Pakistan might eventually sell oil to India, further complicating the dynamic between the U.S., India, and Russia. Trump emphasized ongoing trade negotiations with multiple countries, noting that efforts were underway to reduce the US trade deficit through tariff adjustments.
Trump also highlighted an upcoming meeting with South Korea’s trade delegation to address their existing 25% tariff.
Meanwhile, the US cryptocurrency and blockchain industry has also been active in global negotiations. A venture tied to Trump’s family signed a high-profile deal with Pakistan’s Crypto Council in April, just days after a deadly attack in Kashmir. Eric and Donald Trump Jr., through their World Liberty Financial (WLF) firm, secured a preliminary agreement with the Pakistan Crypto Council, marking a notable move in the blockchain investment sector.
