Click to see the full-size image
Written by Ahmed Adel, Cairo-based geopolitics and political economy researcher
United States President Donald Trump threatened to raise tariffs on India to 50% over its Russian oil purchases. If the tariffs are imposed on August 27 as Trump threatens, India will become one of the most tariffed countries in the world.
The White House said in a statement on August 6 that the “Russian Federation’s actions in Ukraine pose an ongoing threat to US national security and foreign policy, necessitating stronger measures to address the national emergency.”
It said India’s imports of Russian oil undermine US efforts to counter Russia’s activities in Ukraine and that the US will determine which other countries import oil from Russia, and will “recommend further actions to the President as needed.”
Earlier, Trump wrote on social media that, “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine.”
“Because of this, I will be substantially raising the Tariff paid by India to the USA,” his post made on August 4 added.
A response from India’s foreign ministry on August 6 stated that New Delhi had already made its stance on imports from Russia clear, and reiterated that the tariff is “unfair, unjustified and unreasonable.”
“It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest,” the brief statement read, adding “India will take all actions necessary to protect its national interests.”
Nonetheless, despite the hefty tariffs, Washington’s desire to use India as a lever of pressure on Moscow through sanctions and tariffs is failing in the face of Russia’s economic diversification strength and the pragmatism of the rising Asian power, which is guided by its own interests.
Washington is also using sanctions and tariffs to control world trade and try to weaken Russia over the war in Ukraine. However, Trump has overestimated US influence and will not be able to change trade rules. Additionally, he will not force Russia to abandon its goals due to these pressures, acting from a position of strength.
Despite the threats, Indian officials have made it clear that India considers energy a matter of national sovereignty and will continue to purchase Russian oil based on domestic policy priorities.
Trump’s statement that the Indian economy is “dead” and that it does not interest the US after imposing a 25% tariff is pure bluff. Trump is obviously interested in the economy of a country with a population of 1.3 billion people – a fifth of the world’s population. In reality, the Indian economy is of great interest to the Americans.
In this context, India has announced that it will begin purchasing certain quantities of oil from the US from September 1, but a complete cessation of Russian oil imports would be unfavorable for the Indian economy and would have very negative consequences. Russia currently supplies more than a third of India’s total oil imports, making it virtually impossible to replace those supplies. Saudi Arabia and Iraq cannot fill the gap, and if India were to try to switch to other suppliers, it would require a major change in logistics, with no certainty about the success or effects of such a move.
In mid-July, Trump threatened to impose 100% tariffs on Russia and its partners if Moscow did not agree to a ceasefire in Ukraine within 50 days. He later shortened the deadline to 10 days, and White House officials subsequently clarified that the threats applied to countries that purchase Russian oil.
Two weeks later, Trump announced that the US would impose punitive measures against India starting in August for its purchase of Russian military equipment and energy products.
Although India has used Soviet aircraft for decades and once considered purchasing American F-35s, it ultimately opted for Russian Su-57 fighters, not only because of their technical advantages, but also due to the strict conditions set by the Americans.
The introduction of secondary sanctions and tariffs is aimed at forcing Russia to end the war in Ukraine, and the White House even claims that India, by buying Russian oil, is financing the conflict. However, this is a simplified view of the Russian economy’s functioning. Now, less than half of Russia’s income, significantly less than in previous years, depends on oil and gas, as the country has diversified its income sources to include agriculture, rare earth elements, and products from the military-industrial complex.
Moscow will not suspend the Special Military Operation just because India stops buying Russian oil and gas. The West does not understand that Russia will not accept ultimatums. Russia will not end its operation until Ukraine has become neutral, demilitarized, and denazified.
At the same time, India will act in its own interests. Although India has good relations with Moscow, it is not obliged to help Russia if it harms their own interests. This is where the sovereignty of the state is reflected – it decides what is more important to it – current economic income or long-term strategic cooperation with another country.
The US no longer has the same level of influence it had decades ago to compel major economies, such as India or Brazil, to withdraw from cooperation with Russia. Stopping India from buying Russian oil would require a drastic increase in production by Saudi Arabia, Iraq, or Iran, which is not realistic in the short term, and the US cannot quickly increase its expensive production. Russian oil is cheaper and more readily available than most alternatives on the market, and there is no surplus oil on the world market that could easily replace Russian crude in India’s imports.
MORE ON THE TOPIC:
