In a blistering statement that has caused shockwaves through world markets and diplomatic circles, former US President Donald Trump announced that he would drastically increase tariffs on Indian imports. Why now? India’s massive ongoing buying of Russian crude oil, Trump complains, is not just subsidizing Russia’s war against Ukraine but also being on-sold by India for a profit.

“India is not only buying large amounts of Russian Oil, they are then, for most of the Oil purchased, reselling it on the Open Market for enormous profits,” Trump tweeted. He then addressed a tweet to his base and U.S. allies both: “They don’t care how many Ukrainian people are being slaughtered by the Russian War Machine. Because of it, I will be greatly increasing the Tariff paid by India to the USA.”

It is not the first time Trump has brought it up. Trump last week threatened to slap a 25% tariff on Indian goods, with the threat of further unspecified sanctions. Monday’s move is more assertive, with his threat to raise tariffs “substantially,” although without specifying levels.

Why is India buying Russian oil?

India has continued to ramp up its Russian oil imports as the conflict in Ukraine has intensified. In contrast to Western nations that have imposed sanctions on Russian energy, India has pursued a middle path—prioritizing economic security and national interest. Russia, seeking purchasers who would take its oil outside of Europe, has sold its crude oil at deep discounts. Those discounted prices have been too hard to resist for India, particularly when inflation, currency stress, and global energy volatility are the drivers.

India imports close to 85% of its oil needs, and therefore, energy security is a cause of concern for it. India not only saves billions by taking Russian oil at discounted prices but also stabilizes its domestic market supply. Indian policymakers feel that as a sovereign country, they can make decisions in the interest of their people, rather than the Western foreign policy agenda.

Besides that, India’s refining sector retails the likes of jet fuel and diesel—some of which are produced from Russian crude—on the open market. This has resulted in accusations, including from Trump, that India is “profiting” from the war. This is, however, standard practice in the international oil business and not specific to Russian oil. Most nations purchase crude from one point, refine it, and then retail the final product on the international market.

Trump’s Political and Economic Strategy

Trump’s tariff threat against India might be puzzling in isolation. It’s a strategic move with domestic and international implications. Domestically, it’s part of his “America First” agenda—a promise to call out other countries if they’re seen to be encroaching on U.S. interests. Picking on India, a strategic trading partner, sends a signal that no nation is beyond reach, especially when American jobs and international morality are involved.

Worldwide, Trump’s message is a shot across the bow—not just to India, but to other nations still trading with Russia despite Western sanctions. It’s an economic isolation strategy to rein in Russia’s allies and neutral partners, and force them to decouple.

But it goes deeper than that. Trump’s economic strategy has always been more tariff-based coercion than diplomacy. As president, he has imposed tariffs on China, the EU, Mexico, and Canada—most frequently as the bargaining chip in bigger trade agreements. His tough talk resonated with voters concerned about outsourcing, trade deficits, and job loss.

But applying the same playbook in India is more dangerous. The United States and India have an emerging strategic partnership, particularly on defense, technology, and pushing back against China’s expansion in the Indo-Pacific. Isolating India could create tension in an alliance that the two countries have been seeking to build.

The Fallout: What’s at Stake?

If Trump returns to office and enacts his tariff threat, the economic effect would be significant. India exports a lot of products to the U.S., such as medicine, clothes, electronics, jewelry, and IT services. A rise in a big tariff would disturb such industries, raise the price for American consumers, and induce India to retaliate.

Indian businesses, particularly small and medium enterprises, would be most affected by trade restrictions. It would also impact employment opportunities in export industries and retard the economic rhythm of India at a time when it’s being viewed as a global growth driver.

Meanwhile, US companies reliant on Indian imports—be it drugmakers or tech firms—may face supply chain disruptions and increased costs. US consumers might have to pay extra for certain products. That makes the tariff threat a double-edged sword.

Apart from economics, there is the matter of diplomacy. What would this do to US-India relations? Would it bring India closer into the orbit of other major powers like China or Russia? Would it undermine cooperation on global challenges like climate change, cybersecurity, and regional security?

Experts caution that tariffs to compel foreign policy conformity tend to frequently backfire. Rather than isolating the intended target, it tends to unite them to intensify their choices, particularly if they perceive that the pressure is unjust or lopsided.

What Comes Next?

For now, Trump’s rhetoric is one of threat—nothing has been done officially, and one doesn’t know the specifics. But they’ve been able to make a point about a tricky and high-risk question: how do major powers treat nations that have continued to engage with Russia?

India, on its part, will not be distracted by the words of one politician, no matter if he is a former or future U.S. president. New Delhi will remain firm on a tightrope, maintaining strategic autonomy while balancing relations with global partners on either side of the geopolitics divide. As the U.S. heads into election time, Trump’s foreign policy rhetoric will become even more strident. Whether returning to the White House or not, his influence on American discourse and future policy is still enormous. One thing is sure: the global oil trade, once purely transactional, is now inextricably linked with ethics, alliances, and power. The Trump-India tariff drama is just another indication of how global trade is no longer dollars and cents—it’s diplomacy, strategy, and world influence as well.