US Treasury Secretary Scott Bessent has issued a warning that the United States might escalate secondary tariffs on India depending on the outcomes of President Donald Trump's imminent meeting with Russian President Vladimir Putin scheduled for Friday in Alaska. In his recent interview with Bloomberg TV, Bessent articulated concerns about India's purchasing of Russian oil, saying, "We've put secondary tariffs on Indians for buying Russian oil. And I could see, If things don't go well, then sanctions or secondary tariffs could go up."
This warning follows President Trump’s earlier imposition of a 25% penalty on India for its transactions involving Russian oil and military equipment. The US government has been actively seeking to mediate peace between Russia and Ukraine, and Trump has emphasized the possibility of "severe consequences" should Moscow refuse to participate in a ceasefire agreement.
During the Anchorage meeting, Trump and Putin will discuss strategies to resolve the Ukraine conflict. Bessent highlighted the need for European nations to support the United States in enforcing these sanctions, stating, "The Europeans need to join us in these sanctions. The Europeans need to be willing to put on these secondary sanctions."
India's surge in Russian crude purchases, which constituted 35-40% of its oil imports in 2024—a stark rise from merely 3% in 2021—has led to a strain in diplomatic relations between Delhi and Washington, complicating ongoing trade negotiations. The Indian government has justified its purchases by arguing that, as a major energy importer, it must opt for the cheapest available crude to shield its population from escalating costs.
Bessent previously described India as "a bit recalcitrant" in trade talks during an interview with Fox Business. The Trump administration's tariffs are framed as measures to enhance the US economy and ensure equitable global trade practices. Trump has frequently chastised India, labeling it a tariff abuser, while seeking to address a substantial $45 billion trade deficit with the nation.
Trade discussions between India and the US have been ongoing for several months and are scheduled to resume, with US negotiators expected to visit India on August 25. However, experts note that India’s reluctance to lower tariffs on agricultural and dairy products has been a significant hurdle in reaching an agreement.
Moreover, Trump’s new proposed 50% tariff on India is set to take effect on August 27, and analysts predict that this could effectively serve as an embargo on trade between the two nations. Consequently, India is projected to become the most heavily taxed US trading partner in Asia, significantly affecting its export-driven sectors such as textiles and jewelry, and potentially slowing its economic growth by as much as 0.5%.
