Trump Hits India with 25% Tariff and 'Penalty'

Trump has repeatedly said that the goal of his sweeping tariff regime is to dramatically cut the United States’ trade deficit with other countries.

Economists have questioned this motive, however. They note that importing goods from countries with lower labor costs means that Americans can pay lower prices for finished products.

There is also deep uncertainty as to whether American workers would be willing or able to do the low-skilled and potentially dangerous jobs needed to produce the goods typically imported from overseas, like clothing, toys and chemicals.

Earlier this year, Trump went so far as to declare America’s global trade deficit an emergency threat to national security in order to claim the legal authority to impose unilateral tariffs without consulting Congress.

Trump’s plans to impose an additional “penalty” on India over its trade with Russia also comes as he has increased his rhetoric in recent weeks over President Vladimir Putin’s invasion of Ukraine.

In an escalation earlier this month, the president threatened to implement secondary tariffs of 100% starting in early August on countries that buy Russian oil and gas, unless the Kremlin reaches a ceasefire deal with Ukraine.

China, India, Brazil and other major U.S. trade partners that rely on Russian energy would be hit particularly hard by a tariff like this.