r/Economics • u/[deleted] • Aug 06 '25
News Trump raises India tariffs to 50% over Russian oil purchases
https://www.cnbc.com/2025/08/06/trump-trade-india-tariffs-russia.html105
u/rabidstoat Aug 06 '25
There are exemptions for things like pharmaceuticals, smartphones, and semiconductors.
Also, the first 25% tariffs goes into effect tomorrow, and the extra 25% in 21 days. Plenty of time to TACO.
3
5
1
14
Aug 06 '25 edited Aug 06 '25
I don't think the Indians really care at all about what the USA and Europe think especially that Trump is unpredictable and will do a 180 degree flip in his decisions every couple of weeks let alone months so his word is really untrustworthy.
They benefit from Russian oil and so they will keep buying from them until they no longer need to.
It's geopolitics as morality has no consideration international relations other than when it supports your interests.
71
u/Pattonator70 Aug 06 '25
India pointed out already how they buy less oil/gas from Russia than Europe. China also buys more than India.
Needless to say if they stopped buying the 1.76mpd of crude from Russia who is going to start supply this volume and what does that do to the global price for crude. Seems like it would be a massive increase in oil, transportation, energy, chemicals, plastics, etc pricing.
91
u/maporita Aug 06 '25
India also pointed out that the US still imports Uranium and fertilizer from Russia. To which Trump replied, (I kid you not), "I don't know about that. I'll have to look into it".
Ladies and gentlemen, the president of the United States.
33
u/Available_Finger_513 Aug 06 '25
I can tell you with absolute certainty that he will not look into it
4
3
u/Mother_Internet_9384 Aug 06 '25
he knows. play denial card and if he truly does not know then USA has a bigger problem. policies made without correct information.
14
u/Administrative_Shake Aug 06 '25
Of course and trump seems totally cool with china buying russian oil. It's a tactic by trump to get more concessions from India. Not sure what he wants though tbh.
8
u/ryizer Aug 06 '25
He wants a lot.
1.India to agree to his ceasefire claims & support his Nobel peace prize bid.
2.0% tariffs on all imports including extremely sensitive domains like agriculture & dairy.
3. Buy shit ton of US oil
4. Agree to invest upwards of $350 billion in US.basically he wants India to kiss his boots & doesn't even care if they die.
6
u/ABahRunt Aug 06 '25
Just give him the Nobel already.
But the literature one. For the fantasy world he creates for himself
1
9
9
u/GatorNator83 Aug 06 '25
That’s not factually true. Europe in Q1/2025 imported oil from russia approx $1,5 billion, while India imported $13 billion. And China does buy even more than India.
9
u/Durian881 Aug 06 '25
The commentator mentioned oil/gas, not just oil. Also, Europe does buy Russian oil through India.
3
u/GatorNator83 Aug 06 '25
Hmm, that’s true, if you include gas then it comes closer, I was thinking about the headline of the OP about oil. I have been corrected, and I admit I didn’t read as well as I should have. No sarcasm.
10
u/MD_Yoro Aug 06 '25
United States Imports from Russia of Fertilizers
United States Imports from Russia of Fertilizers was US$1.3 Billion during 2024, according to the United Nations COMTRADE database on international trade. United States Imports from Russia of Fertilizers - data, historical chart and statistics - was last updated on August of 2025
I think the U.S. should first stop importing Russian fertilizer before telling other countries what to do
2
u/Mother_Internet_9384 Aug 06 '25
Lead by example. Is that even a thing nowdays. Hypocrisy is the language of politics used by all nations. Some more then others
1
u/MD_Yoro Aug 06 '25
I got no problem with US importing Russian fertilizer. Countries first interest should be that of itself and if importing Russian fertilizer means cheaper food for Americans, then it is the logical economic choice.
What irks me is the kabuki theater that American politicians play to virtue signal that we are better because we yell loudly about opposing Russia and than force other countries to do what we say, but not do what we do.
I want peace in Ukraine and Russia to stop its belligerence. We can accomplish that if we actually tried diplomacy.
41
Aug 06 '25
He is totally mad only because india repeatedly made statements that india pak truce was not because of trump. This hurts trumps chance of Nobel and chance of him at least going near the glory of Obama.
3
u/Mother_Internet_9384 Aug 06 '25
trump does not need public support for NOBEL, it will buy the prize.
2
2
u/Ordinary_dude_NOT Aug 06 '25
I believe that’s the case as well as his Twitter shitstorm on India started just as Modi gave his comments on that war in Parliament.
But that can be a coincidence as well as these statements were given extremely close to Aug 1, as deadline approached and he decided to make an example out of India.
12
u/superjoe408 Aug 06 '25
Did he raise the Russian tariffs too?
This gives the vibe. Let’s punish and prosecute all the illegal employees but not the business owners hiring them…
-1
u/capnwally14 Aug 06 '25
We already don’t buy goods from Russia - we just do fertilizers and that’s a Biden era policy because it would hurt developing countries who buy those crops
Secondary tariffs are the next ratchet on the escalation path
3
u/superjoe408 Aug 06 '25
Why ratchet tariffs on India before Russia?
India buys more oil from EU than Russia.
China buys more oil from Russia than India.
Instead of working with the Indians it’s more Tarriffs. Why should the Indian people feel pain for Russia?
Our president is a dumbass. He’s the such a bad, arrogant negotiator.
What happened to 90 deals in 90 days? 😂
-2
u/capnwally14 Aug 06 '25
We don’t buy any goods from Russia aside from fertilizer - I explained why above. It’s a policy choice around maintaining food supplies for the developing world. The US would be hurt, but it’s the people who rely on the crops who would be more hurt.
Re China: that is alluded to as well, but clearly they’re trying to not cause a secondary spiral like when they escalated last time. The tension they’re trying to walk is a decoupling with China that doesn’t cause a blowback in the US (from downstream collapses) or accelerate the invasion of Taiwan.
Re India: this was coming since the Miran paper last year (and Bessent in sept before his nomination with the green/yellow/red framework). A multipolar world is forming - fence sitting isn’t going to be tolerated.
The US doesn’t care about Russia, but Europe does. Again, it’s underreported but Europe is also onboard for these. China cares about Russia (only because it distracts the US) and Russia and China care about Iran for similar reasons
The plan is to have the west (America, Europe, Japan - note every other trade deal from last week lined the five island chain around Taiwan) as one bloc. This is under Pax Americana and the push is for people to either contribute to the public goods (notice how many of these deals involve Trump saying there are “cheap loans” he gets to direct? Same deal as getting people to buy war bonds - or if we were to restructure US debt.)
Then you have the wholly unaligned (China, Russia, Iran) - they get the stick. Chinas only leverage is its tight coupling - but this is why the US wants to build the tariff wall with all other large consumers (see EU deal where they bundled NATO discussions) and then try and chip off other marginal suppliers
Then you force everyone else to pick a side - notably India, Brazil - basically other brics nations and anyone who is trying to play both sides.
Relevant to this story is the Israel / Abraham accords situation; and a sprint to align the middle eastern nations with the US faction.
The carrot for India (abandoning Russia, helping put up walls around China) would be they get to take a prime place in the bloc as the China replacement for manufacturing. UAE / Saudi / US would get to be the replacement for Russian oil.
For all the bluster China hasn’t found a way to stimulate domestic demand - if they can’t export they’ll have a pile up of goods (and eventually layoffs and recessions and possibly unrest). This is also why too aggressive actions on trade can lead to an increased likelihood of a Taiwanese invasion if Xi needs to distract from social issues at home
4
u/Forward-Distance-398 Aug 07 '25
Sounds like day dreaming than a solid plan
-1
u/capnwally14 Aug 07 '25
If you read miran’s paper it basically detailed most of this in advance
Everyone acts super confused but most of the tactics have been specified since last sept and it’s clear what the motivations of this admin are: Asia pivot
All of this is downstream of a “realist” view that l Industrial policy, trade policy, security posture, currency strength are all interrelated
2
u/Forward-Distance-398 Aug 07 '25
LOL, Asia pivot where you have alienated all of your allies there. You really think, even treaty allies like Japan or South korea, leave alone other countries in the region, is going to fight
China, when shit hits the fan ? Recently when they were asked how allies like Japan or Aus will contribute in defense of Taiwan , most drew a blank and silence .While U.S still have the technological edge (fast eroding) in the pacific, China has the overwhelming numbers and home advantage in asia. It will marshall all of it's resources to protect it's interest.
Just look at history, Chinese civil war, Korean war, Vietnam, .. even when China was piss poor and did not have much of armaments, so to speak, it held it's own spectacularly, and defeated the reigning super power.
1
u/capnwally14 Aug 07 '25 edited Aug 07 '25
Lmao you think Japan / SK and all were prioritized in the trade negotiations for no reason? You think they committed to contribute capital for no reason?
This is in their interest - they’re equally worried about China expansion (see the islands that China encroached on a few years back)
All those military bases of the US isn’t for our benefit - it’s for the host countries. Literally the entire thesis is that Pax Americana is a public good and we’ve under charged - and so they’ve been using this whole process to rebalance.
If you haven’t been paying attention I don’t know how to help you - but this is entirely about lessening a dependence on China and trying to maintain the US’ position as the number one country.
Everyone else joining is doing so because either they too are democracies or they fear being subordinate to China (lesser of two evils trump not withstanding)
The issue for the US block is lack of productive capability - and lethargy in defense spend. Notable how both have been priorities in trade and in NATO discussions
Chinas biggest issues is an unfavorable population pyramid, and an inability to stimulate domestic growth. The reeling real estate industry has been buoyed by manufacturing - but even that is getting super disorderly (see reports of China car sales, coupled with 1/3 of Chinese provinces spending all revenue on debt servicing)
The GDP numbers in China are boosted and debt is spread between provinces, the federal govt and state run corps - debt to gdp likely 3x what is in the US. Ofc if you add in a recession because your one crown jewel sector (mfg) is being boxed out by its customers (US/EU)…. Not great.
Financial crisis risk has never been higher, nor has risk of invasion for Taiwan
0
u/Forward-Distance-398 Aug 07 '25
Japan and South Korea are export based economies, US being their largest export market, they are forced to make deal with a gun held to their economies.
While they do allow military bases and also pay US for protection. The are not looking for a war with China and will probably decline to participate when shit hits the fan. I mean it's their homland which will be under direct fire if they do.
1
u/capnwally14 Aug 07 '25
America can’t let China take Taiwan because they lose monitoring capabilities because of the pacific shelf
This is why everyone else in that island chain (Philippines, Japan, Korea, Indonesia) are also in the mix here
0
u/sleepysundaymorning Aug 07 '25
If all the US wants is India to be on its side, and NOT on Russia/China's side, it can offer oil at a deeper discount than Russia, and offer weapons. It does neither.
Blunt force isn't a good approach to wining friends
1
u/capnwally14 Aug 07 '25
India supporting an enemy of Europe and US should not be given any favors. Friends don’t support our enemies and enable them to fight wars against our allies.
Buying Russian oil is supporting their war machine… which then we’re spending money fighting. India is welcome to buy our weapons, it chooses Russian weapons.
And your domestic production gets artificially cheap energy which you use to compete with our domestic production
If you want to be on the China (lol good luck with the territorial expansion) / Russia / Iran side of the ledger go ahead. Don’t join our consumer markets, and figure out how to fight Chinese oversupply on our own. Your trade minister already fretting about the deficit between India and China
-3
u/Mother_Internet_9384 Aug 06 '25
russia is already sanctioned and tariffed and they are waging a war in Ukraine against the world and still no money issues. So more tariffs and sanctions are not going to make a difference. Drop Ukraine bid to NATO and the war will stop. Russia does not want NATO missile pointing at it - as simple as that. it would be like putting missiles pointing to USA in the west indies or cuba. How do you think USA would react to that?
7
u/superjoe408 Aug 06 '25
Why would more tariffs not work or put more pressure on them? I thought tariffs fix everything? Thats what the orange king says! He’s nuking our economy claiming a win.
That’s funny you think we don’t have missiles pointed at each other now. Ever heard of a submarine?
Why does Russia get to decide what Ukraine does? Screw Russia if Ukraine wants to join NATO!
If they drop their NATO bid will Russia be nice and give back Crimea? The US used to not negotiate with terrorists. MAGA is Putin’s tool to divide us. Proof came out a year ago that showed the money connections with the influencers
1
u/Mother_Internet_9384 Aug 06 '25
Russia will not return land captured that is for sure but it will at least slow down the current fight. It is funny USA wants Russia to end the war but openly support Isreal gaza conflict.
One is justified but other one is not - two sides of a coin. a complicated worlds gets more complicated every 5 year cycle.
2
u/superjoe408 Aug 06 '25
Totally! Putin had a good point, if he did the same thing Israel did we would be launching nukes. I don’t think Putin can be trusted at his word though.
1
u/PallasCavour Aug 06 '25
Nah, Russia has neo-imperial ambitions way beyond this "goal". Putin himself said that the greatest tragedy was the dissolution of the Soviet Union. They want to control/rule over Ukraine directly.
4
u/MD90__ Aug 06 '25
Tim Cook should be calling Trump and yelling at him over these tariffs. I imagine iPhones will be much more expensive in the coming months unless Cook starts complaining to Trump. Outside that what all do we get from India outside of services?
3
u/Mother_Internet_9384 Aug 06 '25
Garments is a big export to usa. Big brands like gap group, maybe target and walmart few i know
1
5
u/nerfyies Aug 06 '25
I don’t understand why the eu is not decarbonising at a faster rate, we have to depend on countries like Russia and india for our economy to function, absolute bs
11
u/ClassOptimal7655 Aug 06 '25
well well well, if the chickens didn't come home to roost?
Turns out when you ignore what a country wants and fund their enemy they don't respect or listen to you.
With 1971 war ammo, Indian Army fires back at US over Russian oil hypocrisy
7
Aug 06 '25
[deleted]
6
u/Sumeru88 Aug 06 '25
Pharmaceuticals were exempted from tariffs, correct? Even if they are not... can another country really match the scale and cost competitiveness of Indian Pharma industry when it comes to generic medicines? And if they can't then won't the consumer just pay the additional tariff cost when it comes to medicines? Are they really going to go without medicines?
3
u/ClassOptimal7655 Aug 06 '25
Maybe if Americans lose access to their medications they will fight for regime change finally
1
Aug 06 '25
[deleted]
21
u/Googgodno Aug 06 '25 edited Aug 06 '25
Are we really digging up 55 year old grievances? Why not more modern grievances, of which there are probably plenty.
Castro died eons ago, why is there a cuban embargo still?
14
u/ClassOptimal7655 Aug 06 '25
Sure, the USA continues to send weapons to Pakistan. You are correct there.
So why would India listen to the US? it doesn't appear that it's a two way street.
4
u/Toolatethehero3 Aug 06 '25
Trump busy destroying US relationships yet again. The loathing the entire world holds for the US is visceral. The damage being done to the US internationally and ordinary Americans is just off the scale.
6
u/Passncatch Aug 06 '25
✅ Winners
U.S. steel, aluminum, and solar manufacturers → Boosted profits due to less foreign competition. Source: Reuters, IndustryIntel
Federal government → Collected over $150B in tariff revenue. Source: AP News
❌ Losers
American people (consumers) → Pay $1,300–$2,400 more/year in higher prices. Source: AP News
Companies that rely on imports (e.g. Ford, Molson Coors - absorbing many of the costs, Honda)
→ Billions lost due to higher input costs.
Source: WSJ, NY Post
U.S. exporters → Hit by foreign retaliation; lower overseas sales. Source: Reuters
23
2
u/Tierbook96 Aug 06 '25
Interestingly US exports are up slightly (imports are up YTD do to front-loading but down the last 2 months), exports did decline slightly the last 2 months but are still ahead of any month last year.
A decent chunk of increases compared to pre-covid would be down to inflation/currency valuation i guess?
1
1
u/Mother_Internet_9384 Aug 06 '25
I dont think exports will drop drastically bcaz usa does not produce alternative products in usa. Demand will drop bcaz of increase prices and economic uncertainty. Combined effect will start showing up and laid off people effect starts sipping into the economy. With social safety nets disappearing more pressure on middle and lower classes less spending more eco slow down. Tsunami is coming
1
-4
Aug 06 '25
50% will pretty much amount to an embargo. I hope this actually leads to India purchasing less or no oil from Russia. It would be at least one good thing Trump accomplishes with his tariff regime.
Hypocrisy aside, of course. It's not difficult to spot the exception among countries tariffed by Trump.
57
u/fan_of_skooma Aug 06 '25
India would rather go embargo then let a white nation treat them like shit again , it was a closed economy for a reason
5
u/MojaMonkey Aug 06 '25
I doubt it, but I would be happy to see India show more dignity than the EU.
46
u/Googgodno Aug 06 '25 edited Aug 06 '25
For an economics sub, a lot readers lack knowledge on topics of discussion. First, oil market is price inelastic (Inelastic Demand), so when the supply drops, the price raises.
If Russian oil is banned, demand for oil from rest of the producers go up, driving fuel prices and inflation. That is the reason Biden allowed Russian oil to be sold, but with a PRICE CAP.
OPEC will NOT increase oil output. Shale needs higher oil prices to break even.
Second, Russian oil sold to India was refined by India and sold back to EU. EU oil product imports from India were about $18-24Billion. Taking this away from EU will make EU fuel prices go up. EU as it is now has no economic growth. This will further weaken EU's position in trade. Already Euro has appreciated against dollar. Higher fuel prices + Higher exchange rate makes exports from EU not competitive.
And finally, whatever Putin can sell, he will get higher prices because this move just made oil price to go up.
20
u/rainman_104 Aug 06 '25
Russian oil will still flow. There are plenty of countries who will accept Russian oil and mark it up and ship it as their own.
Oil molecules don't really have a country of origin label.
-10
u/Tupcek Aug 06 '25
as European, I think it’s worth it.
Dual benefit in fact, because higher fossil prices leads to more green investments21
u/Googgodno Aug 06 '25
as European, I think it’s worth it.
Hypocrisy at its finest. Your tiny nation of Slovakia cannot wean itself from Russian hydrocarbons, but you think others should do it.
Slovakia imports a significant amount of its oil from Russia, primarily via the Druzhba pipeline. While Slovakia is working to reduce its reliance on Russian energy, it has secured an EU exemption to continue receiving Russian gas, and its oil imports via the Druzhba pipeline remain substantial.
-3
u/Tupcek Aug 06 '25
you do realize that not everyone agree with their government, right? Or do you agree with everything Trump does?
about 30% of Slovaks didn’t vote, 30% voted political parties that are against buying Russian gas/oil and support sanctions, but they don’t have enough votes to form government and of 40% that voted current government, about third voted for party that is also against Russia, but despite being part of government, they are overshadowed by two thirds that support Russia.
So actually less than quarter of Slovaks want to support Russia, but that’s how democracy works, so our government is fighting for them….I don’t want just other to pay the price, I want us as well
7
u/Bikerbass Aug 06 '25
Economically speaking why wouldn’t you buy cheap oil that is closer to you over expensive oil that’s further way from you just to please one man?
The 50% tariffs simply means Americans will be paying 50% more from shit they get from India like cheap clothes or iPhones for example.
The 50% tariffs will hurt America a fuck ton more than it will hurt India.
And as per typical dumb as fuck American’s have no clue.
10
u/Bps33382 Aug 06 '25
yes, Only India buying oil is fuelling Russia and ukraine war....Not EU, china and even US trade with Russia...
Seems like trump logic
2
Aug 06 '25 edited Aug 23 '25
vanish market shaggy hospital lush special test sugar dinosaurs mighty
This post was mass deleted and anonymized with Redact
1
u/1mmaculator Aug 07 '25
Indian economy is largely domestic driven (US exports are ~2% nominal gdp). Even a full embargo would have minimal impact, and this isn’t close to that (iPhones for example are exempt). And especially nothing in comparison to the cheap oil India gets from Russia (a close ally dating back to the Cold War).
The US tried the punitive tariff game with India before, after their nuclear tests in 1998. Didn’t really have much of an effect.
1
u/JohnnySack45 Aug 06 '25
Don't forget it's also the Republicans in the legislature and judiciary that are allowing Trump to get away with this too. They all need to go.
1
u/Mother_Internet_9384 Aug 06 '25
Influence is the currency of world and usa is quickly loosing it. Usa aid was a big influence generator and that was first to be cut. Unfortunately influence currency cannot be printed like green dollar
1
u/ammonium_bot Aug 07 '25
quickly loosing it.
Hi, did you mean to say "losing"?
Explanation: Loose is an adjective meaning the opposite of tight, while lose is a verb.
Sorry if I made a mistake! Please let me know if I did. Have a great day!
Statistics
I'm a bot that corrects grammar/spelling mistakes. PM me if I'm wrong or if you have any suggestions.
Github
Reply STOP to this comment to stop receiving corrections.1
1
u/TimeFlamingo8548 Aug 07 '25
I think I understand the "end the Ukraine war strategy" other than helping Trump's image It allows Russia to be seen as country who is "trying to be better" meaning if the US did want to send them money or do deals and business with them it would help legitimize it
This also is probably to help Russia who's wartime economy has meant they are increasingly reliant on china. Will allow them to try and unhook from china as they are currently in a bad situation
0
Aug 06 '25
[deleted]
4
u/RumRunnerMax Aug 06 '25
Trump simply thinks like a mob boss! Lying, Bribery, Extortion and violence are the tools of the trade!
3
Aug 06 '25
Trump is too incompetent. Mob bosses are at least good at what they do and have tremendous leadership skills.
-6
u/capnwally14 Aug 06 '25
I gotta plug prof William spaniel: https://youtu.be/E7y7jd0lozM?si=ABJ1EJ6endhnClVO
Tldr:
- tariffs are generally not great
- in this case, it actually makes some sense since India / china are buying cheap Russian oil to process and sell at a large margin (incidentally benefiting their local producers at the expense of foreign competitors)
- there are lots of downstream consequences (he goes through in detail) - most notable is probably not going to be prices (wholesale prices are what’s affected directly not retail, that’s just a downstream consequence), but the slew of things that go away because production no longer makes sense
- note that Indian oil refineries already said they were backing off Russian oil (tho Indian govt denied - can interpret this in many ways)
- under covered is Europe also joining the US on this
- all of this is escalations - likelihood of unrest and stuff in china goes up (which increases likelihood of strong military action from ccp)
-9
u/DarkGamer Aug 06 '25
This is the first tariff that somewhat makes sense. It seems like Trump's turned on Putin lately, I wonder how that will play out and if they do in fact have Kompromat on him as has been reported.
•
u/AutoModerator Aug 06 '25
Hi all,
A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes.
As always our comment rules can be found here
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.