In a significant development, US President Donald Trump on Wednesday imposed an additional 25% tariffs on India over Russian oil purchase. With this the total tariff on India increased to 50%. Notably, Trump signed a nine-section order while outlining the details of various aspects such as the background, the tariffs, the scope of duties and stacking, among others.
"To deal with the national emergency described in Executive Order 14066, I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil. In my judgment, imposing tariffs, as described below, in addition to maintaining the other measures taken to address the national emergency described in Executive Order 14066, will more effectively deal with the national emergency described in Executive Order 14066," the US President said in the executive order.
Total tariff increases to 50%
After the order, the total tariff on Indian goods, barring a small exemption list, will be 50 per cent. While the initial duty becomes effective on August 7, the additional levy will come into effect after 21 days.
The development comes a day after Trump said that India has not been a good trading partner and announced that he will raise the tariffs on New Delhi "very substantially" over the next 24 hours because it is buying Russian oil.
Here's what Trump said before imposing extra tariff
"With India, what people don't like to say about India, they're the highest tariff nation. They have the highest tariff of anybody. We do very, very little business with India because their tariffs are so high,” Trump said in an interview with CNBC Squawk Box.
"India has not been a good trading partner, because they do a lot of business with us, but we don't do business with them. So we settled on 25% (tariff), but I think I'm going to raise that very substantially over the next 24 hours, because they're buying Russian oil. They're fuelling the war machine. And if they're going to do that, then I'm not going to be happy,” he added.
When asked about the trade deal with India that seemed imminent, Trump said the “sticking point” with India is that its tariffs are too high. “Now I will say this, India went from the highest tariffs ever, they will give us zero tariffs…. But that's not good enough, because of what they're doing with oil.”
A day earlier, Trump said he will “substantially” raise US tariffs on India, accusing the country of buying massive amounts of Russian oil and selling it for big profits.
However, India mounted an unusually sharp counterattack on the US and the European Union for their "unjustified and unreasonable" targeting of New Delhi for its procurement of Russian crude oil.
India hits back at the US on tariffs
Firmly rejecting the criticism, India pointed out the double standards in targeting it on the issue and said both the US and the EU are continuing their trade relations with Russia.
"Unlike our case, such trade is not even a vital national compulsion," the Ministry of External Affairs (MEA) said in a statement.
White House Deputy Chief of Staff Stephen Miller, in an interview to Fox News Sunday, stated that President Trump has said very clearly that “it is not acceptable for India to continue financing" the Ukraine war by purchasing oil from Russia.
Trump mounts sharp attack on India and Russia
Last week, Trump mounted a sharp attack on India and Russia for their close ties and said the two countries can take their "dead economies down together", a remark which prompted New Delhi to say that India is the world's fastest-growing major economy.
Trump had earlier announced a 25 per cent tariff on imports of Indian goods along with an unspecified "penalty" for buying "vast majority" of Russian military equipment and crude oil.
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