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India-US Trade Row: The Real Motive Behind Trump's Tariff Threat
Donald Trump's threat to impose higher tariffs on Indian goods appears to be about punishing India for buying Russian oil. However, a deeper look reveals this is less about the Ukraine conflict and more about a strategic push to boost US oil exports, redirecting global energy trade, and exerting economic pressure on a key partner.
The recent post by Donald Trump on Truth Social, threatening to "substantially" raise tariffs on Indian goods, has sparked a significant row between Washington and New Delhi. While Trump’s message frames the issue as a moral outrage over India’s continued purchase of Russian oil, a closer look suggests the motive is far more complex and rooted in America's own economic and energy interests. This isn't just about Ukraine; it's a calculated move to reshape global energy alliances and assert economic dominance.
A Tactic to Boost American Oil
On the surface, Trump’s accusation is that India is profiting from the war by buying discounted Russian crude and then selling refined products on the open market. He links this directly to the casualties in Ukraine, suggesting India lacks concern for the human cost of the conflict. However, this public condemnation comes at a time when the Trump campaign is heavily supported by US fossil fuel giants, and his proposed tax package includes significant incentives for the American oil and gas sector.
India is already a growing customer for American oil, with US crude shipments surging by over 50% in the first half of 2025. By pushing India away from cheaper Russian alternatives, Trump's policy could force India to pivot to costlier options, including American oil and liquefied natural gas (LNG). This move would not only increase profits for his domestic backers but also significantly enhance the US's strategic influence in the global energy market.
Tariffs as a Bargaining Chip
Trump's tariff threat is not a blunt instrument but a highly sophisticated piece of economic leverage. As a major export market for India, the US takes in nearly a fifth of its goods. A tariff hike would hit key Indian industries, from textiles and pharmaceuticals to auto parts and electronics. This could cost India's export sectors an estimated $18 billion annually, impacting jobs and businesses.
By creating this economic pressure, Trump is essentially holding India's economy hostage to its energy policy. Experts believe that if New Delhi were to abandon discounted Russian oil, its annual import bill could climb by $11 billion, leading to higher inflation and slower economic growth. This dual pressure- tariffs on exports and a higher energy bill - is a powerful tool to force a change in India’s trade and energy priorities.
India's Measured Response and the Double Standard
The Indian Ministry of External Affairs (MEA) has responded with a firm, pragmatic defense of its position. It highlighted that India turned to Russian oil after traditional suppliers diverted their exports to Europe, and pointed out the irony that the US had previously encouraged this very trade to "ensure global price stability."
The MEA's statement also exposed a perceived double standard, noting that the EU’s trade with Russia remains substantial, and the US itself continues to import critical resources like uranium, palladium, and fertilisers from Russia. This response underscores a crucial point: India's energy decisions are a "necessity compelled by global market situation" and are driven by its national interest and economic security.
The China Question: A Tale of Two Policies?
The most revealing aspect of Trump’s approach is the difference in his tone and actions towards India and China. While both countries are purchasing significant amounts of Russian oil, Trump’s administration has, at times, appeared to be more lenient with Beijing.
This discrepancy highlights the deeply political nature of Trump’s trade policy. The US has a far more intertwined and complex economic relationship with China, and a full-blown trade war carries immense risks for both economies. The sheer scale of the US-China trade deficit and the strategic competition between the two superpowers make it a different ball game. India, while a major partner, represents a more manageable target for this kind of pressure campaign. By singling out India, Trump may be testing the waters and demonstrating his willingness to use economic tools to enforce a new world order, one where US energy interests take precedence over historical alliances.
Ultimately, Trump’s playbook blends oil politics with trade pressure. His latest warnings reflect not just anger at Moscow but America’s wider push to redraw energy alliances and secure economic advantage. By linking oil and tariffs, he’s drawing a hard line, one aimed at securing economic advantage, not defending global norms.
#USIndiaTrade#Tariffs#EnergyPolitics
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