US Threatens More Tariffs on India Amid Trump-Putin Peace Talks

The U.S. has warned that heightened tariffs on India could follow if upcoming peace talks between President Trump and President Putin fail, indicating that ongoing geopolitical dynamics are influencing trade policies.

US Treasury Secretary Scott Bessent has stated that Washington may impose additional tariffs on India based on the results of President Donald Trump's scheduled meeting with Russian President Vladmir Putin. This discussion is set to happen on Friday in Alaska, aimed at addressing the ongoing conflict in Ukraine. Bessent emphasized that if negotiations didn't bear fruit, the U.S. might reinstate or even escalate existing secondary tariffs against India.

"This could follow from our ongoing tariffs on Indian purchases of Russian oil," Bessent commented during an interview with Bloomberg TV. Earlier in the month, Trump had already issued a 25% tariff penalty on Indian imports in retaliation for its procurement of oil and military supplies from Russia. The consequences of the war in Ukraine have prompted the U.S. to intervene as a mediator, with Trump recently warning of "severe consequences" should Moscow refuse to agree to peace terms.

The upcoming Trump-Putin meeting is viewed under a critical lens, as Europe also watches closely, with Bessent insisting that European nations need to support these sanctions. In recent times, India has significantly increased its intake of Russian crude oil, making these imports account for 35% to 40% of its total oil purchases—up sharply from just 3% in 2021.

Despite the U.S. pressure, India maintains its stance, arguing the necessity to secure the most affordable energy sources to shield its impoverished populations from surging costs. In an earlier communication, Bessent had called India "bit recalcitrant" in terms of trade negotiations. Stressing a need for fair global trade practices, Trump has described India's tariffs as excessive and has pursued avenues to narrow the existing $45 billion trade deficit with the country.

Ongoing trade talks are set to resume with U.S. negotiators traveling to India on August 25. However, experts point to India's reluctance to lower tariffs on agricultural and dairy commodities as a significant hurdle to these discussions. Trump's newly imposed tariffs, which are set to take effect on August 27, could be perceived as an embargo—rendering India the heaviest taxed partner in U.S. trade relations across Asia, with potential repercussions including a sharp decline in India’s export-driven sectors and an anticipated reduction in its economic growth by up to half a percentage point.