Trump Signals No Immediate Secondary Tariffs on India for Oil

President Donald Trump has suggested that the United States may refrain from imposing secondary tariffs on countries, including India, that continue to procure crude oil from Russia. This statement comes amid concerns that additional tariffs could significantly impact India’s economy, particularly as it relies on Russian oil supplies.

In an interview with Fox News aboard Air Force One on August 27, 2023, Trump addressed the situation, referencing the ongoing geopolitical tensions surrounding Russia’s actions in Ukraine. He stated, “Well, he (Russian President Vladimir Putin) lost an oil client, so to speak, which is India, which was doing about 40 percent of the oil. China, as you know, is doing a lot…And if I did what’s called a secondary sanction, or a secondary tariff, it would be very devastating from their standpoint. If I have to do it, I’ll do it. Maybe I won’t have to do it.”

This comment comes just days after a summit meeting between Trump and Putin, which concluded without any agreements to address the ongoing conflict in Ukraine. The summit’s lack of progress raised questions about future US policies regarding sanctions and tariffs on nations engaging with Russia.

On August 25, 2023, Scott Bessent, the US Treasury Secretary, indicated that if discussions between Trump and Putin did not yield positive results, secondary sanctions on India could become a reality. In an interview with Bloomberg, Bessent noted, “I think everyone has been frustrated with President Putin. We expected that he would come to the table in a more fulsome way. It looks like he may be ready to negotiate.”

Bessent elaborated on the potential for tariffs, stating, “And we put secondary tariffs on the Indians for buying Russian oil. And I could see, if things don’t go well, then sanctions or secondary tariffs could go up.” He emphasized the fluctuating nature of sanctions, asserting that they “can go up, they can be loosened. They can have a definitive life. They can go on indefinitely.”

As the situation unfolds, the US has already imposed tariffs totaling 50 percent on India, which includes a specific 25 percent tariff for its purchases of Russian oil. This measure is set to come into effect from August 27, 2023.

In response to these tariffs, India’s Ministry of External Affairs stated that the targeting of the country is “unjustified and unreasonable.” The ministry further emphasized, “Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.”

With the geopolitical landscape continuously evolving, the implications of Trump’s remarks and the potential sanctions on India remain significant. The global oil market, as well as the broader economic relations between the US and India, will be closely monitored in the coming weeks as decisions are made regarding sanctions and trade policies.