Trump’s Oil Tariffs on Putin May Risk Harming Ties With Modi, Xi

7a6wwi4r7x9wds0)[wmmuyqv_media_dl_1.png Nymex, ICE

Article content

(Bloomberg) — US President Donald Trump’s latest threat of 100% tariffs on Russia would risk complicating relations with two nations crucial to his economic and strategic goals: China and India.

Article content

Trump on Monday threatened tariffs of about 100% on Russia unless it reached a peace deal with Ukraine in the next 50 days, saying the levies would come in the form of “secondary tariffs.”

Article content

Article content

Article content

Matt Whitaker, the US ambassador to NATO, later said the planned action effectively represents secondary sanctions on countries buying oil from Russia. “It’s about tariffs on countries like India and China that are buying their oil,” he told reporters. 

Article content

Article content

Global markets — increasingly skeptical of Trump’s near-daily tariff threats — largely shrugged off the news, suggesting there’s little concern around any potential impact to crude flows. Trade analysts said the proposed levies would be difficult to police and, if implemented, could well backfire on the US. 

Article content

“It remains unclear how exactly you would do this, and how China or anyone would certify that they’re meeting the US requirement,” said Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore. “It’s going to add more fuel to the fire of why these countries are skeptical of receiving a deal from Trump.” 

Article content

Trump’s latest threat comes at a crucial time in negotiations with both Asian nations.

Article content

India is closing in on an agreement that would see 20% so-called reciprocal levies on the South Asian nation before a final deal is reached in the fall. Prime Minister Narendra Modi’s government has struck a more defiant stance with the US in recent weeks as frustration with Trump has grown. 

Article content

Article content

US ties with China, meanwhile, appear on the upswing after the world’s two largest economies reached a trade truce in May. 

Article content

Secretary of State Marco Rubio last week said a meeting between Trump and President Xi Jinping was likely for later this year. And on Monday, Nvidia Corp. said the US would allow the resumption of sales of its H20 AI chip to China — the biggest sign yet that the White House is easing export controls on Beijing in return for rare-earth minerals needed to make a range of high-tech products. 

Article content

“Despite the temporary truce in the trade war between China and the US, there’s still a lot uncertainties on other fronts,” said Zhu Feng, executive dean of Nanjing University’s School of International Studies. “A secondary tariff will bring even more chaos and China will surely respond forcefully.” 

Article content

India became a major importer of Russian oil since the invasion of Ukraine in early 2022, and China’s imports have also climbed over the same period. Washington policymakers view those stepped-up oil purchases as a form of tacit support for Russia that helps buoy the nation’s economy and weakens the impact of sanctions.