Prime Minister Narendra Modi will chair a crucial high-level Cabinet meeting at 1 pm on Friday to assess the impact of steep US tariffs on Indian exports. The decision follows US President Donald Trump’s announcement of a punitive 50% tariff on Indian imports, citing New Delhi’s continued trade with Russia.
The move, which marks a sharp turn in US–India ties after a period of warming relations, comes alongside Trump’s declaration that no further trade talks will take place until the dispute is resolved.
“No, not until we get it resolved,” Trump said, without clarifying whether “resolution” referred to the Ukraine conflict, India’s Russian oil imports, or other trade disputes.
Tariffs Linked to Russia–Ukraine War
Trump’s new duties appear aimed at pressuring Moscow to agree to a ceasefire, as India is the second-largest buyer of Russian oil. Earlier this year, he warned of “secondary sanctions” on countries trading with Russia. Initially, Trump set a 50-day deadline for Russia to agree to a ceasefire, later shortening it to 12 days, ending Friday. The new 25% tariff targeting India will be added to an earlier 25%, but it will take effect from August 27.
No Tariffs for Chipmakers Building in US
In a related development, US Commerce Secretary Howard Lutnick said semiconductor firms committing to build factories in the US during Trump’s term could avoid tariffs on their chips while construction is underway.
“If you commit to build in America… you can import chips without a tariff, but you must be monitored and confirmed by the Commerce Department,” Lutnick told Fox Business.
This comes a day after Trump unveiled a plan for 100% tariffs on chip imports if no such commitments are made.
Impact on US Consumers
American businesses and households will soon feel the effects of these higher tariffs, now at levels unseen in nearly a century. Rates vary from 15% on most partners, 19% on select Asian countries, and 20%–50% for others. A 55% tariff on Chinese goods could take effect next week if no US–China trade deal is reached.
Data Points to US Double Standards
While the US penalised India for its Russian oil imports, official trade data shows Washington traded more with Russia than with Ukraine during the same period, raising questions over the consistency of its sanctions policy.
Inputs : Fox Business & NDTV World
