India-US Tariff War: Trump Threatens New Tariffs on India Over Russian Oil, Praises PM Modi
India-US Tariff War - Trump Threatens New Tariffs on India Over Russian Oil, Praises PM Modi
Former US President Donald Trump has once again issued a warning to India regarding its purchase of oil from Russia. In a statement made on Monday, January 5, 2026, Trump explicitly stated that if India doesn't cooperate with the United States on this matter, it could face increased American tariffs. This threat comes at a time when trade relations between the two nations are already strained, and a significant decline in bilateral trade has been observed. Trump's remarks were reportedly captured in an audio recording released. By the White House, underscoring the seriousness of the issue.
Renewed Tariff Threat Over Russian Oil
Donald Trump, on Monday, January 5, 2026, reiterated his threat to India concerning its oil purchases from Russia, while trump stated that if India doesn't cooperate with the US on this issue, America could quickly increase tariffs on India. According to reports, Trump said, 'If India doesn't help on the issue of buying oil from Russia, we can quickly increase taxes on India. ' An audio released by the White House reportedly features Trump making these remarks. This statement could ignite a new wave of tension in US-India trade relations, especially as global geopolitical dynamics are rapidly shifting. The issue of purchasing oil from Russia has been a sensitive topic. For the US, and Trump's statement reflects a continuation of his past policies.Escalating Tariffs: A Historical Overview
Despite his stern warning, Trump offered praise for Indian Prime Minister Narendra Modi. He described Modi as 'a very good man' and suggested that India was making efforts to 'make him happy. ' According to Trump, 'They knew I wasn't happy, and it was important for them to make me happy. ' He further added, 'Basically, they wanted to make me happy. ' Trump also noted, 'They do trade, and we can quickly raise taxes on them. ' This commentary indicates Trump's tendency to link trade relations with personal rapport and satisfaction, suggesting his belief that India is willing to comply with his terms to maintain trade ties with the US.
The United States has already imposed substantial tariffs on India. According to Trump, the US had already levied a 50% tariff (tax) on India, of which 25% was a penalty, specifically because India was purchasing crude oil from Russia. Trump also highlighted that the tariffs imposed by the US on India have seen the highest increase, while initially, a rate of 10% was applied, which then escalated to 25% on August 7, and by the end of last year, it had reached 50%. This escalating tariff regime presents a significant economic challenge for India, as it makes Indian products less competitive in the American market and places an additional burden on exporters.Significant Decline in India-US Trade
These tariffs and trade tensions have had a direct impact on India-US trade. An analysis conducted by the Global Trade Research Initiative (GTRI) in December revealed a substantial decline in India's exports to the US. Between May and September 2025, India's exports to the US plummeted by 37. 5%, falling from $8. 8 billion to $5. 5 billion. This figure represents the largest decline observed in recent years, while such a significant drop in exports is a matter of concern for the Indian economy, given that the US is one of India's largest trading partners. This reduction in trade underscores the delicate state of economic relations between the two nations.The Path Forward: Bilateral Trade Agreement
Despite these challenges, India and the United States are actively working towards a comprehensive bilateral trade agreement (BTA). It's anticipated that the first phase of this agreement will be completed and made public soon. This agreement could serve as a crucial step towards stabilizing. Trade relations and fostering future trade growth between the two countries. However, Trump's latest threat and the ongoing tariff disputes could cast a shadow over the progress and finalization of this agreement. It will be essential for both nations to collaborate to overcome these trade barriers and establish a stable and mutually beneficial trading relationship.