Trump Says US to Hike India’s Tariffs Over Russian Oil Buys
(Bloomberg) -- President Donald Trump said he would be “substantially raising” the tariff on Indian exports to the US over the Asian nation’s purchases of Russian oil, a move New Delhi slammed as unjustified in an escalating fight between the two major economies.
“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits,” Trump wrote on social media Monday. “They don’t care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA.”
Trump did not say by how much he would increase the levy. Last week, he announced a 25% rate on Indian exports and vowed more duties if India continued to buy oil from Russia.
The US president’s warning comes ahead of an Aug. 8 deadline for Russia to reach a truce with Ukraine, with the administration threatening so-called secondary sanctions on countries that purchase Russian energy. Ukraine’s allies view those purchases as helping to prop up Russian leader Vladimir Putin’s economy and undercutting pressure on Moscow to end a war that is now in its fourth year.
India has been a top Trump target in the campaign to end the war. New Delhi has been defiant, however, with Prime Minister Narendra Modi — who previously enjoyed warm relations with Trump — responding by urging Indians to buy local goods and signaling that his country will continue to buy Russian oil.
“The targeting of India is unjustified and unreasonable,” said India’s Ministry of External Affairs in a social media post later on Monday, accusing the EU and US of trading with Russia when it is “not even a vital national compulsion.”
The officials said “India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer” and called them a “necessity compelled by global market situation.”
India has morphed into a major buyer of Moscow’s crude since the 2022 invasion of Ukraine, spurred on by the discounts it receives. On average, the country has been buying Russian crude at a rate of about 1.7 million barrels a day so far this year, according to tanker tracking data compiled by Bloomberg.
India exported about 1.4 million barrels a day of refined fuels in the first half of this year, according to Kpler data compiled by Bloomberg. Diesel or gasoil cargoes made up approximately 40% of total fuel exports, while gasoline and blending components comprised about 30% of the shipments.
Still, quantifying how much oil India exports that’s made specifically from Russian crude is hard because refiners generally consume an array of barrels and then export an even wider range of fuels. The European Union recently launched a package of sanctions that will ban the purchase of fuel made from Russian crude, but traders are still waiting for the body to detail how the measures would work in practice.
Any disruption to Indian purchases of Russian oil could force it to look elsewhere for supplies. Last week, the country’s largest processor purchased several million barrels of crude from the US and UAE in sudden purchases that were both large and for relatively immediate delivery, people familiar with the matter said.
Under the president’s deadline for Putin to halt the fighting in Ukraine, secondary sanctions targeting buyers of Russian oil could be imposed Friday.
“Secondary sanctions and tariffs against those that are paying for this war — like China, India and Brazil — by buying the oil that Russia is producing, is an obvious next step to try and bring this war to an end,” Matt Whitaker, the US ambassador to NATO, told Bloomberg Television. “This is really going to hit them where it counts, and that is in their main revenue source, which is the sale of oil to these countries.”
Trade Talks
Trump’s escalating tariffs stunned India after months of negotiations. The president has intensified his rhetoric against India, assailing its levies and other barriers to US goods, continued energy buys from Russia and participation in the BRICS group of developing economies, in particular over the bloc considering alternatives to the US dollar.
The Indian government has indicated it intends to continue talks with the US in hopes of securing lower tariffs. India is considering ramping up natural gas purchases from the US and increasing imports of communication equipment and gold.
Officials see those moves as helping to narrow India’s trade surplus with the US, a key concern for Trump. The US had a trade deficit with India of about $43 billion last year, the 11th largest, according to figures from the International Monetary Fund. But there are numerous sticking points, with Modi reluctant to open up sensitive sectors like agriculture and dairy to the US.
Relations between Modi and Trump have deteriorated in the president’s second term. After clashes earlier this year between India and Pakistan, Trump threatened to block access to US markets if the countries did not halt the fighting. Trump has claimed his actions brought peace, a view that has rankled New Delhi.
Pressure on Russia
India has been caught in the middle of Trump’s enhanced focus on ending Russia’s war in Ukraine. The president vowed to quickly end Russia’s invasion but those efforts have been stymied by Putin, who has responded with only maximalist demands for Ukrainian territory and refused face-to-face discussions with Ukrainian President Volodymyr Zelenskiy.
Trump has grown increasingly frustrated with Putin, leading to his latest threats to impose economic penalties on Moscow. He has floated tougher sanctions in the past only to delay action in hopes of preserving negotiations.
Trump told reporters Sunday that special envoy Steve Witkoff would go to Russia this week — on Wednesday or Thursday — for further discussions. Tensions between Washington and Moscow intensified last week when Trump said he had moved two nuclear submarines in response to “highly provocative statements” from former Russian President Dmitry Medvedev.
(Updates to add Whitaker remarks in paragraphs 12-13. An earlier version corrected data on Indian exports of refined fuels.)
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