However, Buiter warns that such tariffs hurt everyone involved: “There are no winners in trade wars,” he said, pointing out that US companies and consumers will also bear the cost. If all proposed measures are implemented by August 7, the average tariff on US imports would jump from 2.3% to 17.3%, a move he calls “a fiscal contraction” that could hurt global trade.
India began buying more oil from Russia after supplies to Europe were disrupted in 2022. Initially, the US was supportive, as this helped keep global oil prices stable. But with the war continuing, Trump now seems to be linking India’s purchases to punitive trade actions.Read Here | US President Trump threatens ‘substantial’ tariff hike on Indian goods in 24 hours
Buiter argues that India isn’t the only one buying Russian oil—Europe still does too. He believes Trump’s focus on India, rather than China (Russia’s top partner), is inconsistent and unfair.
Ambassador Rahul Chhabra, former Secretary for Economic Relations, says India is already reducing its oil purchases from Russia through fewer forward contracts. However, he cautioned that stopping Russian oil imports overnight isn’t realistic: “These are long-term contracts and cannot be switched off like a tap.”Chhabra believes that India is trying to explain its position diplomatically but doubts whether the Trump team is listening. He adds that behind-the-scenes talks are ongoing and broader issues—like nuclear energy cooperation, arms deals, and agricultural tariffs—are also part of the conversation.
Richard Rossow, Senior Fellow at the Center for Strategic and International Studies (CSIS), believes Trump’s pressure is more of a tactic than a real policy shift. “The aim may be to push India to reduce support to Russia and open up trade further,” he said.
He also points out that the US currently lacks senior officials with a deep understanding of India. With many key positions unfilled, Rossow warns that Washington might be missing the broader benefits of the India-US relationship—including rising Indian investment, student migration, and growing energy imports from the US.
While some feel a direct conversation between Prime Minister Modi and President Trump might help, Chhabra notes that high-level calls usually happen only after issues are resolved behind the scenes. “These are not one-hour calls to negotiate deals. They happen once the real work is done by various teams,” he said.
Still, he doesn’t rule out the idea of such a conversation: “There’s no harm in speaking,” he added, “but we must not expect big breakthroughs from it.”
For the entire discussion, watch the accompanying video
Also Read | Trump claims India offered zero tariffs but he refused because of Russian oil purchases
