US Treasury Secretary Scott Bessent has signaled that the United States may substantially increase secondary tariffs on India depending on the outcomes of the upcoming meeting between President Donald Trump and Russian leader Vladimir Putin. This high-stakes meeting is scheduled for Friday in Alaska, amidst ongoing concerns regarding the war in Ukraine and its repercussions on global trade dynamics.
In an interview with Bloomberg TV, Bessent emphasized the implications of the talks, stating, "If things don't go well, then sanctions or secondary tariffs could go up." This warning follows Trump's recent decision to impose a 25% penalty on India, which was added to an existing 25% tariff on the country's purchases of oil and weaponry from Russia. The US is actively engaging both Russia and Ukraine to secure a ceasefire, with Trump reiterating that failure to reach a peace agreement could lead to "severe consequences."
The delicate situation has strained US-India relations, particularly given the significant rise in India's imports of Russian crude oil since the onset of the Ukraine war, which now constitutes about 35% to 40% of India's total oil imports in 2024, a sharp increase from just 3% in 2021. India has defended its actions, citing the need to secure affordable fuel for its population of millions facing cost-of-living pressures.
Bessent's remarks followed his characterization of India as "a bit recalcitrant" in trade discussions with the US. Trump has long criticized India's trade practices and seeks to address the $45 billion trade deficit through stricter tariffs, set to become effective on August 27, which could hinder India's export-driven sectors such as textiles and jewelry.
As trade talks are poised to resume with US negotiators visiting India on August 25, experts warn that India's resistance to lowering tariffs on key agricultural and dairy goods could complicate discussions further, potentially impacting the economic growth of both nations amidst ongoing geopolitical tensions.
