US Threatens India With Higher Tariffs Over Russia Trade

US Finance Minister Scott Basent has once again threatened India with additional tariffs. In an interview with Bloomberg, he stated that the decision to impose these new tariffs will depend on the outcome of the meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska on Friday.

The US is trying to mediate a ceasefire in the ongoing war between Russia and Ukraine. This is the main reason for Trump's discussion with Putin. Trump had warned on Wednesday that if Moscow does not agree to a peace deal, it will face severe consequences. In a separate interview with Fox News, Basent mentioned that India has been "a bit too stubborn" in trade negotiations. Talks between the two countries stalled earlier this month after Trump refused to continue discussions due to India's trade with Russia and other disagreements.

Currently, a 25% US tariff is already in place on Indian imports. An additional 25% tariff on top of that, specifically targeting India's purchase of Russian oil and weapons, is set to be implemented from August 27. This would bring the total tariff on Indian goods to 50%.

Trump and Putin's Alaska Meeting

President Trump is scheduled to meet with Russian President Putin in Alaska on August 15 to find a way to end the three-and-a-half-year-long war in Ukraine. If the meeting takes place, it will be the first time the two leaders meet on US soil. Russia had initially suggested the UAE as a venue for the meeting, but Trump later chose Alaska.

Basent's Criticism of India's Trade Stance

The US accuses India of supporting the Ukraine war by purchasing oil from Russia. Basent, in his statement to Fox News, labeled India as "stubborn" in trade talks. The trade negotiations between India and the US were halted this month by Trump due to India's ongoing trade with Russia and other unresolved issues. Now, US officials are expected to visit India on August 25 to resume talks before the 50% tariff is scheduled to take effect on August 27. However, media reports suggest that India's refusal to allow American dairy products into its market could be a major hurdle.

The 'Non-Veg Milk' Controversy

The US wants its dairy products, such as milk, cheese, and ghee, to be allowed for import into India. India is the world's largest milk producer, with millions of small farmers dependent on the sector. The Indian government fears that allowing American dairy products would severely harm local farmers. Religious sentiments also play a significant role.

In the US, cows are often fed a diet that includes animal bone-derived enzymes (like rennet) for better nutrition. India considers milk from such cows as 'non-veg milk' or "non-vegetarian" milk. This cultural and religious difference has been a major point of contention in trade discussions.

New Tariffs and India's Potential Retaliation

On August 6, President Trump announced and signed an executive order to impose an additional 25% tariff on India, which will be effective from August 27. The executive order states that this action is a direct result of India's purchase of Russian oil. This is in addition to the 25% tariff he announced on July 30. This means India will face a total tariff of 50%.

The Indian Ministry of External Affairs has called the move unjust. According to a report by Hindustan Times, India is now considering retaliating by imposing tariffs of up to 50% on selected American products. If this happens, it would be the first official retaliation from India against President Trump's tariff policies.