September 6, 2025

Trump Punishes India with 50 Percent Tariffs for Buying Russian Oil

Trump’s 50 percent tariffs on India start today.

Oil-Related Tariff Shock

Bloomberg reports Trump Slaps India With 50% Tariffs, Upending Ties With Modi

President Donald Trump imposed a crushing 50% tariff on Indian goods to punish the country for buying Russian oil, upending a decades-long push by Washington to forge closer ties with New Delhi.

The new tariffs, the highest in Asia, took effect at 12:01 a.m. in Washington on Wednesday, doubling the existing 25% duty on Indian exports. The levies will hit more than 55% of goods shipped to the US — India’s biggest market — and hurt labor-intensive industries like textiles and jewelry the most. Key exports like electronics and pharmaceuticals are exempt, sparing Apple Inc.’s massive new factory investments in India for now.

“This is going to be a very big impact on Indian exporters because 50% tariffs are not workable for the clients,” said Israr Ahmed, managing director of Farida Shoes Pvt. Ltd., which depends on the US for 60% of its business.

New Delhi has argued the purchases stabilize energy markets, and has said it will keep buying Russian oil “depending on the financial benefit.”

China, Russia Ties

The fraying relationship has pushed India to edge away from the US and forge deeper ties with fellow members of the BRICS bloc.

At the same time, India and Russia have pledged to increase their annual trade by 50% to $100 billion over the next five years. India has ramped up oil imports from Russia since the full-scale invasion of Ukraine began in 2022, and now accounts for about 37% of Russia’s oil exports, according to Moscow-based Kasatkin Consulting.

Citigroup Inc. estimates that the combined 50% tariff poses a 0.6-0.8 percentage point downside risk to annual gross domestic product growth.

The economic impact may be cushioned by the fact that India’s economy is largely driven by domestic demand, rather than exports, so shoring up consumer and business sentiment is key to faster growth. Private consumption makes up about 60% of India’s GDP — and although the US is India’s biggest export market, with shipments of $87.4 billion in 2024, that still amounts to only 2% of India’s total GDP.

Trump Attacks the Weak

Notice how Trump attacks the weak. After repeatedly threatening Russia with severe consequences, Trump did nothing.

Severe Consequences? When?

We have severe consequences, on India. What about the oil and natural gas China buys from Russia?

Please recall my April 21 post China Halts US Liquid Natural Gas Imports, Turns to Russia Instead

What did Trump do besides nothing?

On April 12, I commented Trump Backs Down More on Tariffs Exempts Smartphones, Electronics from China

On May 12, I noted US and China Slash Tariffs for 90 Days with More Planned Talks

China responded to Trump’s tariffs by halting rare earth exports. That’s why Trump backed down.

Chalk up a Two-TACO Trump Day on His Call to Xi Over Rare Earth Elements

Meanwhile, in Canada

Please note Canada Adds 70 Percent More Port Capacity to China to Escape Trump’s Tariffs