Trump Escalates India Tariff Threats Over Russian Oil

Bloomberg's Adam Farrar breaks down the trade relationship between the US and India as President Trump ramps up threats to increase tariffs on India if the country does not stop purchasing oil from Russia.

President Donald Trump said he would be “substantially raising” the tariff on Indian exports to the US over the Asian nation’s purchases of Russian oil, a move New Delhi slammed as unjustified in an escalating fight between the two major economies.

“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,” Trump wrote on social media Monday. “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.”

Trump didn’t say by how much he would increase the levy. Last week, he announced a 25% rate on Indian exports — one of the highest of any major economy — and vowed more duties if India continued to buy oil from Russia.

The US president’s warning comes ahead of an Aug. 8 deadline for Russia to reach a truce with Ukraine, with the administration threatening so-called secondary sanctions on countries that purchase Russian energy. Ukraine’s allies view those purchases as helping to prop up Russian leader Vladimir Putin’s economy and undercutting pressure on Moscow to end a war that is now in its fourth year.

India has been a top Trump target in the campaign to end the war. Prime Minister Narendra Modi — who previously enjoyed warm relations with Trump — has been defiant, urging Indians to buy local goods and signaling that his country will continue to buy Russian oil.

Russia’s oil shipments are yet to show clear signs of being hit by US President Donald Trump’s threat to “substantially” hike tariffs on imports from India, the biggest buyer of Moscow’s seaborne crude.

Four-week average crude shipments edged lower for a second week in the latest data, while seven-day flows rebounded. Seaborne cargoes averaged 3.15 million barrels a day in the four weeks to Aug. 3, down by about 2% from the period to July 27, tanker-tracking data compiled by Bloomberg show.

President Trump has threatened India with undisclosed additional tariffs on top of an already announced 25% rate. The extra levy will come into effect if New Delhi continues to take oil from Russia, Trump said ahead of an Aug. 8 deadline that he set for Moscow to agree a truce with Ukraine.

The US leader first proposed secondary tariffs on buyers of Russian oil in mid-July, subsequently shortening the deadline for their implementation and on Monday focusing specifically on purchases by India.

The country’s refiners have bought about 1.7 million barrels a day of Russian crude so far this year. Before Moscow’s 2022 invasion of Ukraine, they imported virtually none. Much of the refined product made from that crude is then exported back to buyers in Europe, earning Indian processors healthy profits — and indirectly helping to fund Russia’s war in Ukraine.

With OPEC+ oil producers agreeing another big output hike for September and global oil markets forecast to be over-supplied in the second half of the year, the White House could be calculating that there

The tracking of crude shipments from Russia’s western ports is becoming more difficult with an increase in spoofed position signals in the Baltic, the Black Sea and around Murmansk. Bloomberg uses a combination of signals from ships’ automated information systems, port agent reports and satellite imagery to track oil flows.

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