Donald Trump imposes 25pc tariff on Indian imports, plus ‘penalty’ tax over purchase of Russian oil

The US president is ramping up pressure on Moscow to halt fighting in Ukraine and negotiate a peace deal.

Donald Trump shakes with Narendra Modi in the Oval Office in February. Picture: AFP

Donald Trump says he’ll impose a 25 per cent tariff on goods from India, plus an additional import tax because of India’s purchasing of Russian oil.

Posting on Truth Social on Wednesday Mr Trump said that India “is our friend” but its “Tariffs are far too high” on US goods.

The Republican president added that India buys military equipment and oil from Russia, which Mr Trump 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 the administration’s revised tariffs on multiple countries.

He did not specify what the penalty he referred to for Russia trade will be.

Hours later, the India government issued a statement saying it was committed to a fair and balanced trade agreement with Washington.

“India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,” the Indian government said in a statement

The announcement of an additional penalty comes as the 79-year-old Republican has signalled he intends to tighten US pressure on Moscow to halt fighting in Ukraine and negotiate a peace deal.

On Tuesday, Mr Trump said he was giving Russian President Vladimir Putin 10 days — which would mean the end of next week — to change course in Ukraine or face unspecified punishment.

“We’re going to put on tariffs and stuff,” he said, but “I don’t know if it’s going to effect Russia because obviously he wants to keep the war going.”

Agriculture and dairy have been key roadblocks in the India-US trade deal, with New Delhi wary of undercutting millions of smallholder farmers. Picture: Abhishek Chinnappa/Getty Images

India, the world’s most populous country, was one of the first few major economies to engage Washington in broader trade talks.

But six months later, Mr Trump’s sweeping demands and India’s reluctance to fully open its agricultural and dairy sectors have so far prevented New Delhi from sealing a deal that would shield it from punitive tariffs.

While Mr 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 US growth and greater inflationary pressures as the costs of the taxes are passed along to domestic businesses and consumers.

The Census Bureau reported that the US ran a $US45.8bn ($70.94bn) 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.

When Mr Trump in February met with Indian Prime Minister Narendra Modi, the US president said that India would start buying American oil and natural gas.

Mr 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 US tariff rate of at least 25 per cent, saying, “We’re going to see.”

Mr Trump also said the outlines of a trade agreement with India had not yet been finalised.

AP, AFP