What’s the point of a trade deal?
Trump imposes secondary tariffs
To persuade Putin to stop the military offensive against Ukraine, Trump has threatened secondary sanctions against any country that trades with Russia. He said last week that, if Putin did not end the war in Ukraine in 50 days, he would slap 100% tariffs on U.S. imports from states that buy Russian exports.
Simultaneously, NATO Secretary General Mark Rutte also threatened India, China and Brazil with 100% secondary sanctions if they continue doing business with Russia. Meanwhile, Senator Lindsey Graham is pushing for the Sanctioning Russia Act of 2025, a bipartisan legislative proposal, which has the support of Trump and 170 other legislators, that threatens an unprecedented 500% tariff on all US imports from countries that buy Russian oil, gas, petrochemicals or uranium.
In other parts, the US has also threatened 10% additional tariffs on the BRIC countries if they stop trading in dollars. There are also threats of tariffs on Indian pharmaceutical companies and existing additional tariffs on auto and auto parts, steel and aluminium and few other products.
Any country that is presently negotiating a trade deal with the US will have to pause and wonder about the usefulness of the said trade deal, if such ad hoc tariffs supercede the trade agreement. There will always be new geopolitical concerns that come up or new domestic pressures to save some industry or jobs, which will induce additional tariffs.
India could try to build in some mechanisms to avert such ad hoc tariff impositions, but it might be an exercise in futility, given the complete lack of respect for process or agreements. There are court cases internally in the US against these tariffs, but are blatantly ignored at the moment.
With these random tariff impositions and backtrackings, it makes it even harder for people in India to domestically push for the free trade or better trading relations with the US.