Is Trump's 100% Tariff Threat On India 'Leverage To Push Through A Trade Deal'? Expert Weighs In

(MENAFN- Live Mint) The threat of 100% US tariffs on countries buying Russian oil is unlikely to push Russia towards a peace deal, but the measure could give Washington leverage in trade negotiations with India and put pressure on broader India-US ties, according to Rajoshri Roy, Research Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses.

“There is a lot of speculation that perhaps this would give the US leverage vis-à-vis India to push through a trade deal. A 100% tariff on India vis-à-vis any trade with the US makes trade with the United States unsustainable for India,” Roy said.

“It could be a factor in terms of using that as leverage to push through a trade deal and perhaps seek more concessions from India, which hasn't been really forthcoming in the past,” he added.

US President Donald Trump signed a sweeping bipartisan sanctions bill into law, granting his administration extensive secondary-sanctions authority, including the power to impose tariffs of up to 100% on major purchasers of Russian oil and gas.

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Roy said India is unlikely to significantly reduce its purchases of Russian crude, given the importance of those supplies to the country's energy security.

“As far as India drawing down its oil supplies from Russia is concerned, that is unlikely to happen. If you stop buying Russian oil, which meets 50% of our oil imports, where do we get that 50% oil from?” Roy said.

“The world without West Asian oil, without Russian oil, you are looking at an explosion in prices and a scarcity.”

100% tariffs could impact India-US ties

Roy said imposing 100% tariffs on India could have consequences for the future of India-US relations if New Delhi is penalized specifically for continuing to purchase Russian oil.

“It could have an impact on the future of the India-US relationship if the 100% tariffs come in simply because India is buying oil from Russia, which is in India's national interest at this point,” Roy said.

At the same time, Roy said India and the US have previously found ways to manage differences over sanctions and tariffs, leaving room for a possible exemption or negotiated arrangement.

“At the end of the day, the India-US relationship is mutually beneficial. There is no two ways about it. India has drawn certain red lines for itself, stating that if you force us to alter our foreign policy, then we would be forced to look at our own national interest as well,” Roy said.

“In the past, India and the US have found a modus vivendi when it comes to the issue of tariffs. When it came to India buying weapons from Russia, there was an overhang of CAATSA, but India got an exemption. India also got an exemption earlier this year when it comes to the purchase of oil from Russia.”

Roy added,“He might sign that bill, but that doesn't necessarily mean that he is going to impose those tariffs on India. We'll have to see how this plays out. One can expect both India and the US to find common ground on this.”

US sanctions unlikely to change Russia's course

Roy said the broader sanctions campaign is unlikely to force Russia to change its policy on Ukraine. He argued that Moscow has shown a willingness to absorb economic pressure rather than alter its position.

“Economic sanctions are a form of economic coercion, and history has shown that sanctions usually do not work. Russia is a much bigger power, and having studied Russia, it is clear that Russians will not bow down to US pressure, especially pressure coming from a country that Russia considers an equal,” Roy said.

“Sanctions are unlikely to bring about a change in Russia's policy. For Russia, this is also seemingly an existential issue. At the end of the day, geopolitics vis-à-vis sanctions is a no-brainer for the Russians.”

Russia continues to withstand sanctions pressure

Roy said Russia has continued to withstand extensive economic restrictions over the past five years.

“Russia is still the world's most sanctioned country, but Russians appear to be doing what they have been doing for the last five years without backing down. The economy had crashed and rebounded. There are still issues such as inflation, but people seem to be rallying around the flag,” He said.

“Russians are willing to make the sacrifice at this point, even if it means economic pain. You don't see protests in Russia today against the war.”

Uranium exemption fuels debate over US sanctions on Russia

Roy also pointed to what he described as an inconsistency in how different countries treat purchases of Russian resources.

“International relations, major-power diplomacy, all of it is often shaped by double standards or hypocrisy. You have a legitimate interest in buying uranium from Russia, but the same yardstick is not applicable when it comes to other countries buying natural resources from Russia,” Roy said.

“One should be judged by the same yardstick. Unfortunately, in international relations, that doesn't always happen.”

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