Trump announces 25 pc tariff plus penalty on India from Aug 1

US President Donald Trump on Wednesday announced the imposition of a 25 per cent tariff on all goods coming from India starting August 1, plus an unspecified penalty for buying military equipment and crude oil from Russia.
The surprise announcement came a day after Indian officials said that a US trade team would visit from August 25 to negotiate a trade deal.
The announcement is being seen a pressure tactics to get New Delhi to agree to demands made by the US, which has in recent days got favourable trade deals with major partners like Japan, the UK and the European Union. In a post on social media handle, Trump termed India’s trade policies as “most strenuous and obnoxious”. “All things not good! India will therefore be paying a tariff of 25 per cent, plus a penalty for the above, starting on August first,” Trump said.
The penalty because India has made large purchases of oil and military equipment from Russia.
India’s import of crude oil from Russia has risen from 0.2 per cent of total purchases before the Russia-Ukraine war to 35-40 per cent. New Delhi is the largest buyer of Russian oil after China.
Trump said though India is America’s friend, “we have, over the years, done relatively little business with them because their (India) tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country”.
He said India have always purchased significant amount of military equipment and energy products from Russia at a time when everyone wants Russia to stop the “killing” in Ukraine. The government of India on Wednesday said it is studying the implications of US President Donald Trump’s announcement to impose 25 per cent tariffs on Indian goods, along with a penalty from August 1.
It was, however, not clear if the 25 per cent duty will be imposed in addition to the existing 10 per cent baseline tariff.
The 10 per cent tariff, which currently applies to most Indian goods barring a few, was announced by Trump on all countries on April 2.
Also, the exact quantum of the penalty is unclear.
Among India’s major trade competitors, the US has imposed lower tariffs on Vietnam (20 per cent) and Malaysia (25 per cent), but higher on Bangladesh (35 per cent) and Thailand (36 per cent).