Trump threatening India with tariffs as high as 25%

Trump threatening India with tariffs as high as 25%

President Trump is dropping the hammer on India. The president announcing 25% tariffs plus an additional import tax penalty to start on Friday. The penalty stems from India’s buying Russian oil and military equipment. Let’s go to CNN’s Alayna Treene who is over at the White House for us. Alayna, Trump has often touted a very close relationship with India’s President Modi. How could this decision, this latest decision, impact that relationship? Well, I think it’s still to be seen. But this is surprising, Wolf, because from the beginning, ever since the president had really mapped out wanting to work out dozens of trade deals with a number of the United States trading partners, he often said that India was one of the countries that he believed would be the first to make a deal, and we know that many officials from the White House have been going back and forth between Washington and New Delhi to really try and finalize that. But now we’re seeing that he’s really ratcheting up the pressure on India and calling into question the prospect of a deal. And this comes just days. As you mentioned, Wolf, before his August 1st deadline, where he’s going to be reimposing some of the reciprocal tariffs that he had previously put on. Pause. And this is what he said in a pair of social media posts this morning. He essentially sharply attacked India’s trade barriers. But he also directly targeted India’s sustained reliance on Russia, energy and military equipment. He said essentially that India’s tariffs are far too high. They’re among the highest in the world. And he also said specifically that they are, quote, Russia’s largest buyer of energy, along with China. At a time when everyone wants Russia to stop the killing. Now, he, as you said, doubled down on his threat to impose a tariff of 25% on all imports from India beginning this Friday, a little bit higher than the kind of the average we’ve seen him strike with other different countries. And all of this comes and from what we’re hearing from officials here in the Trump administration, is that really the president is emboldened by his recent trade agreements with Japan and the European Union, kind of leading him to take a much harsher stance as we get closer to that Friday deadline. Now, we did hear from the president’s National Economic Council director, Kevin Hassett, this morning, who was trying to break down to reporter some of the president’s frustrations here. He essentially said that he believes that the president is frustrated with the progress that they’ve made and feels that a 25% tariff will address and remedy the situation. He argued that tariffs on India could cause them to reconsider their practices. So stay tuned for all of that, Wolf. We will stay tuned for sure. Alayna Treene at the White House, thank you very much. Now, even before that, the Trump administration is vowing to slap a 50% tariff on Brazilian goods. Brazil says that it hopes to negotiate over that. Trump has linked to the tariff threat to the prosecution of his ally, Brazil’s former president Jair Bolsonaro. Well, India could also face higher U.S. tariffs next month. The White House threatening to hike them to 25% if there’s no trade agreement by Friday. Here to discuss is the chief economist for the Navy Federal Credit Union, Heather Long. Heather, it is good to see you. Where to begin. And let’s pick up on this new threat from the president as it relates to a trade deal with India. It’s clear that negotiations are at an impasse right now as the August 1st deadline is fast approaching. The president said he won’t extend this deadline. That includes a number of countries that haven’t secured a deal, including India, Canada, Mexico and South Korea. But as it relates to India, what is notable is that he also, for the first time, really threatened those secondary sanctions against Russia via India. Given that India has continued to buy oil from Russia, what do you make of that threat? And talk about the impact of being at this impasse, specifically with a country as large as India? Yeah, this is certainly one of the never a dull day in trade policy, as you’re saying. But I will say from a big picture view, we’ve seen this playbook before from the president. He often threatens some very high tariff rate or threatens to walk away from a deal and ultimately he does strike some sort of framework. So I wouldn’t say everything’s over for India. I’m sure they’re working very hard to try to backchannel to the White House to figure out a breakthrough here. But you’re right. The one thing that was really new is trying to ramp up pressure on Russia and on all of Russia’s trading partners to get some sort of deal. You know, the president’s clearly very frustrated with Moscow right now. And India is one of the largest buyers of Russian oil and natural gas at the moment. So that is a little bit of a harder one, I think, for the Indian economy to the Indian leadership to figure out how how can they find a compromise there? And as it relates to China, we know that deadline is actually August 12th, not this Friday. Nonetheless, it is fast approaching. And the fact that we have failed to reach a deal between China and the United States, what risks really are facing both the United States and I would say the global consumers, if in fact, there is no deal. I mean, there’s a huge risk. We obviously import a lot of consumer goods and staples that families buy and need. A lot of people have pointed to computers and cell phones and a number of these critical areas for American families that are coming mainly from China. And so if if the really high tariffs were to go back into place, that will add hundreds of dollars to families budgets. But I’m a little more optimistic on the US China situation. I thought the both sides came out of those talks and why they didn’t reach an agreement. They both were very positive in their comments, and it looks like there will be either an exit, some sort of extension of the August 12th deadline. So I think things will fall into place with China. The India and Brazil stories are a lot more complicated. Yeah, and with China, it’s really hard not to see how both sides have so much at stake by not coming to a deal. So it’s worth their while to to really make that effort and get to a deal sooner rather than later. Let me ask you about the latest read on. GDP for the second quarter came in higher than analysts had expected, a 3% versus 2.3%, which had been the expectation, though there are some signs that the economy continues to slow and some warnings by major U.S. staple companies like Procter and Gamble about where the consumer is right now and how they’re being impacted by this uncertainty surrounding tariffs. Yes, you clearly had the most important number that I was watching today was how is the US consumer doing? We all know that that’s what really drives this economy. And the reason we got the wonderful 3% growth number, it was largely a story of there were just no imports, almost no imports in the second quarter. The actual consumer consumption number was 1.4%. Now that’s good, but it’s not great. All right. It’s up from 0.5% in the first quarter. So we are that’s why we’re seeing resilience more resilience and a lot of us expected for the consumer. But last year consumption was running well above 2%. So you can see that slowdown. And that’s the ongoing kind of confusing part of the economy right now. We’re not in a recession. There’s no sign of recession. But there is clearly a slowdown happening. And if you step back and look at, you know, the full picture, this is a 1% economy. Yeah. And I noted the Procter and Gamble. It’s really a bellwether for the U.S. economy and consumer, saying yesterday that American shoppers are using their pantry inventory, which is delaying purchasing more right now as they’re anticipating where prices may lead next. Which leads me to my next question. it is probably a foregone conclusion that we are not going to see any movement from the fed in terms of lowering rates today. I would imagine then that that will lead to the president, taking aim at Fed Chair Jerome Powell. We’ve gotten used to that as well, our new normal. But what do you think the fed bigger picture may be in a few months from now. We’ll be doing. Yes. I think what everyone’s watching for today, as you said no rate cut. But does the fed Chair Powell begin to open the door or at least turn the handle of the door, maybe on a September rate cut. And, I think he may start to do that. At least say, look, kind of what you and I have been talking about. While overall things look good. There are still a lot of headwinds. There is still a lot of uncertainty. We saw almost no business investment in recent months and pretty, pretty weak hiring we’ve been seeing. And so is that enough to create conditions for a September rate cut? Now you won’t say for sure. It’ll happen, but I think you’ll begin to see him talk about there could be a September cut if they started to see more weakness, particularly on the jobs front. Right. We have seen inflation rise. We’ve also seen the labor market slowing. And I believe we’ll get another check on where that stands this Friday. with the jobs report for the month of July. So we will read into that as well. Heather long, thank you so much. Good to see you. Thank you.

President Donald Trump is ratcheting up the pressure on India, calling into question the prospects of a deal with a key US trading partner just days before his tariff deadline.

Trump, in a pair of social media posts Wednesday, sharply attacked India’s trade barriers and directly targeted India’s sustained reliance on Russian oil purchases and military equipment. He doubled down on his threat to impose 25% tariffs on all Indian imports and threatened an additional “penalty” in response to India’s energy purchases.

CNN’s Alayna Treene reports from the White House, and Bianna Golodryga speaks with Navy Federal Credit Union chief economist Heather Long. #CNN #News