Trump uses 100% tariff threat to pressure India over Russian oil

WASHINGTON: US President Donald Trump has signed a law allowing tariffs of up to 100% on products from countries that import large quantities of Russian oil and gas. However, the tariffs will not take effect immediately and could take about a month to come into force. Trump has the authority to decide the terms and conditions and determine which countries will face the tariffs and how they will be imposed.

The tariffs will target the five countries that imported the largest quantities of Russian oil and gas over the past 12 months. China and India are among the leading importers. The tariffs will not come into effect automatically. Trump could use the law as a tool to achieve broader political objectives. The law also provides for sanctions on companies making major investments in Iran’s weapons and energy sectors.

Pressure to reduce Russian oil purchases

1. Countries that source less than 15% of their total natural gas imports from Russia will not face the tariffs. Countries that reduce their dependence on Russia will also be eligible for exemptions.
2. The US is expected to put pressure on India to sharply reduce its purchases of Russian oil. As Washington views India as a strategic partner in dealing with China, the US may avoid a direct trade confrontation with India. It may also offer alternative energy arrangements to help India reduce its dependence on Russian supplies.
3. The US also aims to reduce China’s financial and defence support to Russia and Iran.

Jaishankar to convey India’s position

External Affairs Minister S. Jaishankar, who will arrive in the US next week for the UN General Assembly, is expected to convey India’s position. India will continue to purchase Russian oil. Chinese President Xi Jinping will arrive in the US on September 23. Trump plans to personally receive Xi at an airbase in Maryland.