On Wednesday, U.S. President Donald Trump released an executive order. This order will impose a high 25% duty on re-imports from India and it is effective in 21 days. This decision raises the bilateral trade tensions to a new level. It comes at a time when India has been buying record quantity of Russian crude oil.
New tariffs are being introduced in addition to a previously announced 25% rate. This new rule, going into effect on Thursday, will further poison the already fraught U.S.-Indian economic relationship. Indeed, as reports indicate, India has become among the biggest buyers of Russian oil in the wake of the conflict. It’s now purchasing about 1.7 million barrels a day. In response, the U.S. government should announce a 50% tariff on every barrel of oil India buys from Russia. This is on top of their usual import duties.
He cautioned that failure to produce or be ready to produce these products in the U.S. would prompt a deadly 100% tariff on importing those semiconductors and chips. This push, among other isolated similar moves, seeks to strengthen domestic manufacturing and combat trade deficits.
In reaction to these developments, the Indian Ministry of External Affairs released a statement, expressing disapproval at the U.S. decision. Further, the Ministry criticized the hiked tariffs as being “unfair, unjustified and unreasonable.” They highlighted that India’s imports are driven by the market and a strong desire to deliver energy security to its citizens.
“It is revealing that the very nations criticizing India are themselves indulging in trade with Russia.” – India’s Ministry of External Affairs
Analysts consider this decision to be a critical step in an overall strategy. They want to recover lost U.S. market share in India and replace oil export drops since 2022. Sara Vakhshouri, an expert in energy markets, explained the significance. She indicated that the U.S. would like to obtain similar Indian exports of other commodities.
…then consider the giant that just stirred up all kind of news by committing $100 billion to expand in the U.S. Tech bohemoth Apple. To make matters worse, they intend to raise another $600 billion in the next four years. This is just the latest big investment by Apple, which committed $500 billion in February of this year. This action illustrates the firm’s evident commitment to growing its footprint in the U.S. market.
US-India trade relations are changing quickly and dramatically. While both countries seek to achieve their economic objectives, they continue to bring each other into the complexities of international trade.