Business
Trump announces 25% tariff on India and penalties for buying Russian oil
President Donald Trump, right, speaks with India’s Prime Minister Narendra Modi during a news conference in the East Room of the White House, Feb. 13, 2025, in Washington. (AP)
WASHINGTON, July 30, (AP): President Donald Trump said Wednesday that he’ll impose a 25% tariff on goods from India, plus an additional import tax because of India’s purchasing of Russian oil.
Trump said on his Truth Social platform that India “is our friend” but its “Tariffs are far too high” on U.S. goods.
The Republican president added that India buys military equipment and oil from Russia, which he said has enabled the war in Ukraine. As a result, he intends to charge an additional “penalty” starting on Friday as part of the launch of his administration’s revised tariffs on multiple countries.
The new tariffs could put India at a disadvantage in the U.S. market relative to Vietnam, Bangladesh and, possibly, China, said Ajay Sahai, director general of the Federation of Indian Export Organisations.
“We are back to square one as Trump hasn’t spelled out what the penalties would be in addition to the tariff,” Sahai said. “The demand for Indian goods is bound to be hit.”
The announcement comes after a slew of negotiated trade frameworks with the European Union, Japan, the Philippines and Indonesia – all of which Trump said would open markets for American goods while enabling the U.S. to raise tax rates on imports. The president views tariff revenues as a way to help offset the budget deficit increases tied to his recent income tax cuts and generate more domestic factory jobs.
While Trump has effectively wielded tariffs as a cudgel to reset the terms of trade, the economic impact is uncertain as most economists expect a slowdown in U.S. growth and greater inflationary pressures as some of the costs of the taxes are passed along to domestic businesses and consumers.
Trump’s approach of putting a 15% tariff on America’s longstanding allies in the EU is also generating pushback – possibly causing European partners as well as Canada to seek alternatives to U.S. leadership on the world stage.
French President Emmanuel Macron said Wednesday in the aftermath of the trade framework that Europe “does not see itself sufficiently” as a global power, saying in a cabinet meeting that negotiations with the U.S. will continue as the agreement gets formalized.
“To be free, you have to be feared,” Macron said. “We have not been feared enough. There is a greater urgency than ever to accelerate the European agenda for sovereignty and competitiveness.”
Washington has long sought to develop a deeper partnership with New Delhi, which is seen as a bulwark against China. Indian Prime Minister Narendra Modi has established a good working relationship with Trump, and the two leaders are likely to further boost cooperation between their countries.
The Census Bureau reported that the U.S. ran a $45.8 trade imbalance in goods with India last year, meaning it imported more than it exported.
At a population exceeding 1.4 billion people, India is the world’s largest country and a possible geopolitical counterbalance to China. India and Russia have close relations, and New Delhi has not supported Western sanctions on Moscow over its war in Ukraine.
The new tariffs on India could complicate its goal of doubling bilateral trade with the U.S. to $500 billion by 2030. The two countries have had five rounds of negotiations for a bilateral trade agreement. While U.S. has been seeking greater market access and zero tariff on almost all its exports, India has expressed reservations on throwing open sectors such as agriculture and dairy, which employ a bulk of the country’s population for livelihood, Indian officials said.
When Trump in February met with Modi, the U.S. president said that India would start buying American oil and natural gas.
Trump discussed his policies on trade and tariffs with reporters accompanying him Tuesday on the flight home following a five-day visit to Scotland. He declined to comment then when asked about reports that India was bracing for a U.S. tariff rate of at least 25%, saying, “We’re going to see.”
Trump also said the outlines of a trade framework with India had not yet been finalized. Once back at the White House on Tuesday, Trump indicated that there were no plans to announce new tariff rates on Wednesday, a claim that turned out to be inaccurate.
Vehicles for export are parked at a port in Pyeongtaek, South Korea on July 31. (AP)
MANILA, Philippines, July 31, (AP): Asian shares were mostly lower Thursday after U.S. stocks slipped, as doubts rose on Wall Street about whether the Federal Reserve will deliver economy-juicing cuts to interest rates by September. Bucking the trend, Japan’s Nikkei 225 rose 1.1% to 41,075.85 after the Bank of Japan kept interest rates steady at 0.5% and raised inflation projections. The move follows Tokyo’s trade deal with Washington.
In Seoul, the Kospi edged down 0.6% to 3,235.83 after South Korea reached a 15% tariff deal with the US, with no levies on American goods like cars, trucks and farm products. The deal also includes South Korea’s purchase of $100 billion US energy imports and $350 billion worth of investments in the U.S. Hong Kong’s Hang Seng index fell 1.1% to 24,814.59, while the Shanghai Composite Index slid 0.8% to 3,586.13.
Australia’s S&P ASX 200 shed 0.2% to 8,741.90. India’s BSE Sensex fell 0.4% to 81,169.49. Taiwan’s TAIEX rose 0.3% to 23,542.52 Rabo Bank, citing the U.S. trade deals with other countries, including Bangladesh, said in a commentary that “it appears to be only a matter of time before India agrees to terms to ensure that it retains favorable access to the US market and all of those other markets that (US President Donald) Trump has demonstrated he has the power to direct through economic coercion.”
Rabo added that the terms of a US-India trade deal would almost certainly include Indian purchases of US arms and energy products and preferential access to U.S. agricultural goods. “A potential loser in all of this is Australia. With the US sending more wheat to Indonesia and Bangladesh and more LNG to Japan and South Korea, Australian exports stand to be displaced from their traditional markets,” it added.
Trump on Wednesday announced a 25% tariff on imports coming from India, along with an additional tax because of India’s purchases of Russian oil, beginning Friday. That’s when stiff tariffs Trump has proposed for many other countries are also scheduled to kick in, unless they reach trade deals that lower the rates.
But the US president said the two countries were still in negotiations. On Wall Street on Wednesday the S&P 500 edged down by 0.1%, coming off its first loss after setting all-time highs for six successive days. The Dow Jones Industrial Average dropped 171 points, or 0.4%, and the Nasdaq composite rose 0.1%. Stocks felt pressure from rising Treasury yields in the bond market after the Federal Reserve voted to hold its main interest rate steady. The move may upset Trump, who has been lobbying for lower interest rates, but it was widely expected on Wall Street.
Brazil’s President Jair Bolsonaro, (right), stands with President Donald Trump during a dinner at Mar-a-Lago, Palm Beach, Fla on March 7, 2020. Bolsonaro’s son, Eduardo is pictured in background on right. (AP)
WASHINGTON, July 31, (AP): US President Donald Trump signed an executive order Wednesday to impose his threatened 50% tariffs on Brazil, setting a legal rationale that Brazil’s policies and criminal prosecution of former President Jair Bolsonaro constitute an economic emergency under a 1977 law. Trump had threatened the tariffs July 9 in a letter to President Luiz Inacio Lula da Silva.
But the legal basis of that threat was an earlier executive order premised on trade imbalances being a threat to the US economy. But America ran a $6.8 billion trade surplus last year with Brazil, according to the US Census Bureau. A statement by the White House said Brazil’s judiciary had tried to coerce social media companies and block their users, though it did not name the companies involved, X and Rumble.
Trump appears to identify with Bolsonaro, who attempted to overturn the results of his 2022 loss to Lula. Similarly, Trump was indicted in 2023 for his efforts to overturn the results of the 2020 US presidential election. Lula left an event about animal rights early on Wednesday after Trump’s move, saying he needed to defend “the sovereignty of the Brazilian people in light of the measures announced by the President of the United States.”
The order would apply an additional 40% tariff on the baseline 10% tariff already being levied by Trump. But not all goods imported from Brazil would face the 40% tariff: Civil aircraft and parts, aluminum, tin, wood pulp, energy products and fertilizers are among the products being excluded. The order said the tariffs would go into effect seven days after its signing on Wednesday.
Also Wednesday, Trump’s Treasury Department announced sanctions on Brazilian Supreme Court Justice Alexandre de Moraes over alleged suppression of freedom of expression and Bolsonaro’s ongoing trial. De Moraes oversees the criminal case against Bolsonaro, who is accused of masterminding a plot to stay in power despite his 2022 defeat. On July 18, the State Department announced visa restrictions on Brazilian judicial officials, including de Moraes.
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