Trump Team Confident U.S., India Will Settle Dispute

U.S. Treasury Secretary Scott Bessent expressed optimism that the United States and India, described as “two great nations,” would resolve escalating trade tensions, despite the Trump administration’s punitive 50% tariffs on Indian goods—the highest imposed on any Asian nation. Speaking to Fox Business, Bessent criticized India’s continued purchase of Russian oil, accusing New Delhi of indirectly fueling Russia’s war in Ukraine by reselling the crude for profit. The tariffs, effective since August 27, 2025, were partly a response to these oil purchases and stalled U.S.-India trade negotiations, which have failed to address India’s high tariffs on American products.

Bessent downplayed the significance of Prime Minister Narendra Modi’s attendance at the Shanghai Cooperation Organisation (SCO) summit in China from August 31 to September 1, where Modi met Russian President Vladimir Putin and Chinese President Xi Jinping. Calling the SCO meeting “largely performative,” he emphasized that India’s democratic values align more closely with the U.S. than with Russia or China. However, he underscored that India’s role as one of Russia’s largest oil buyers—importing 35-40% of its crude from Moscow in 2024—has strained bilateral ties, especially as the U.S. seeks to pressure Russia into ending its war in Ukraine.

The tariffs, comprising a 25% “reciprocal” tariff and an additional 25% penalty for India’s Russian oil trade, reflect President Donald Trump’s broader strategy to address trade imbalances and penalize nations engaging with Russia. Trump previously labeled U.S.-India trade a “one-sided disaster,” citing India’s high tariffs and non-tariff barriers that restrict American goods. The White House sees these measures as leverage to push India toward a trade deal and to indirectly pressure Moscow, though India has defended its oil purchases as essential for economic stability, accusing the U.S. of double standards for continuing its own trade with Russia.

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Bessent also warned of further sanctions against Russia if President Putin does not halt the ongoing bombardment of Ukraine, which has intensified despite recent peace talks in Anchorage, Alaska. “All options are on the table,” he said, noting Putin’s failure to follow through on peace commitments made during discussions with Trump and European leaders. The U.S. is considering additional “secondary tariffs” on countries trading with Russia, with India potentially facing steeper penalties if the situation does not improve.

The trade dispute threatens to unravel decades of warming U.S.-India relations, previously bolstered by shared strategic interests in countering China. India’s Ministry of External Affairs has called the tariffs “unjustified and unreasonable,” arguing that its oil imports were encouraged by the West to stabilize global prices. As both nations navigate this high-stakes standoff, the outcome of ongoing trade talks and Russia-Ukraine peace efforts will likely shape the future of U.S.-India ties and global economic dynamics.

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