President Donald Trump imposed an additional 25% tariff on India over its purchases of Russian oil, escalating the trade dispute and raising total tariffs on the world’s most populous country to 50%.
The additional tariffs are part of Trump’s efforts to end the war in Ukraine. India is the second-largest importer of Russian oil after China, and its purchases counter the Trump administration’s goal of limiting Russian President Vladimir Putin’s war funding by crimping oil export revenues.
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“I find that the Government of India is currently directly or indirectly importing Russian Federation oil,” Trump said in an executive order.
The United States and its allies have implemented various measures to reduce Russia’s oil revenues, which fund its war in Ukraine, including a novel price cap on Russian oil bought by Western countries.
Last week, Trump announced that he would impose a new 25% tariff on goods from India as well as an additional import tax for purchasing Russian oil. Trump criticized India for purchasing a majority of its military equipment and energy from Russia “at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE.”
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Still, Indian officials indicated over the weekend that they will continue to purchase Russian oil despite Trump’s tariff threats.
The Trump administration has introduced “secondary tariffs” on third parties to punish its adversaries, an untested tool of economic pressure. The downside risk is that stringent restrictions on third-party purchases of Russian oil could increase global oil prices, increasing costs for Americans.