Policy
India’s Crude Oil Import Cost UpBy 48% So Far This Year
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India Explores UAE As Key LNG, LPG And Crude Supplier
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GAIL Continues To Seek Equity Stake In US LNG Project
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Oil India Opts For Deepwater Drilling s New Exploration Strategy
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Rs 144.7 Billion Profits Predicted: State-Owned OMCs In For Remarkable Q2 Recovery
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Regulation
Saudi, UAE Keen To Invest In India’s Refinery Sector
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Rising LPG Supply Cost Creates A Fresh Problem For Govt.
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Petrol Pump Operators’ Agitation Over MDR Issue
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India’s Trade Shift Makes U.S Major LPG Import Source
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Alternative Energy / Fuel
India Achieves 300 GW Non-Fossil Fuel Power Capacity
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New Projects
RIL Proposes Underground Coal Gasification Complex In AP
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Mahanagar Gas Commissions Pipeline In Mumbai
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Market Watch
IOC- Jindal Stainless Extend Lubricant Supply Pact
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Companies
Actis
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Actis Announces Launch Of Renewable Energy Platform
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Simplex Infrastructures Gets Oil India Drilling Contract
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Repono Gets Railway Approval For Petroleum Terminal
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Press Release [FREE Access]
Petro Intelligence » India Must Face Down Trump’s Tariff Threats

by R. Sasankan

When US President Donald Trump started to weaponize tariffs as part of a grand design to reignite the engines of American growth in the belief that he could claw back manufacturing jobs from China, there were many who questioned the need for the tariff tantrum and the ability to enforce these levies in a modern global economy.

But Trump has not been the first US president to go down this road.

America's tryst with tariffs dates back to 1789 when George Washington signed the Tariff of 1789 which was explicitly designed to restrict British imports and build young America's manufacturing sectors. President William McKinley championed the McKinley Tariff of 1890, using high rates aggressively to protect domestic manufacturing wages from foreign competition.

Another President, Herbert Hoover, signed the Smoot-Hawley Tariff Act in 1930, raising import duties to record levels to shield American businesses during the Great Depression. This backfired when foreign countries retaliated with their own tariffs, hastening the global economic collapse.

Historically, tariffs served as America's main source of government revenue and a tool for economic leverage long before the modern income tax era. President Richard Nixon imposed a temporary 10% global import surcharge not strictly for long-term protectionism, but as a blunt-force threat to force foreign allies and rivals (like Japan and European nations) to revalue their currencies and renegotiate global monetary rules.

Still, Donald Trump is a lot different from his predecessors both as a person and as US president. Trumpian tariff threats break from past US history by shifting from narrow economic or revenue tools into blunt, universal instruments of geopolitical coercion. While historical tariffs aimed to protect specific domestic industries or raise federal revenue, Trump uses broad baseline threats against friends and foes alike to force non-trade concessions.

Trump administration's "America First" and reciprocal trade policies, hit a peak in mid-2025 when the US imposed a cumulative 50% tariff on Indian goods. This rate was later reduced to 18% in February 2026 following interim trade talks

The Trump administration's latest provocations and tariff threats centre on a White House report titled "The Great Transshipment Scam," which accuses India-along with over 40 other nations-of serving as a shadow corridor by allowing Chinese exporters to route goods and evade US tariffs. The White House explicitly named India as a Tier 1 trans -shipment risk, alleging that manufacturing hubs are being used to repackage, lightly assemble, or re-label Chinese goods to mask their true origin.

Top US officials and proposed legislation (such as the Sanctioning Russia and Iran Act) have leveraged the threat of duties scaling up to 100% or higher over India's continued refusal to halt oil imports from Russia.

Is India's import of Russian crude the real issue or is Trump using it as a weapon to hobble India's fast-growing economy? Russia supplies nearly half of India's total crude imports. Trump and his advisers know that it will not be easy for India to prune price-discounted Russian crude. Cutting Russian imports by half would increase India's annual oil import bill by $5 billion to $10 billion. It would also raise domestic inflation, weaken the rupee, and expand the current account deficit.

What happens if Trump carries out his threat of 100% tariff? I posed this question to a few experts who say a 100% duty would double the cost of Indian goods in the US. This would affect sectors like IT, textiles, pharmaceuticals, and engineering products making them uncompetitive compared to alternative global suppliers.

Public opinion polls show that Donald Trump's approval ratings have tumbled to a record low. Some specific surveys report that his net approval ratings have dropped into negative territory - the recent Reuters/Ipsos poll shows that only 33% approved of his performance while 64% disapproved - while others reveal that 40% of the respondents have labelled him as the worst in US history. Historians generally rank 19th-century figures like James Buchanan and Andrew Johnson at the very bottom in terms of approvals.

India need not get excited over his reported unpopularity. Nor should it bother about the claim that Prime Minister Narendra Modi and Trump are good friends. Personal warmth cannot override Washington's broader strategic sanctions goals. Trump views trade through an "America First" lens, openly accusing India of taking advantage of the U.S. with high historic tariffs.

No one knows what Trump may or may not do. I suspect he does not know which way he will eventually go. The lunges, feints and dramatic turnarounds may be part of a strategy but it has gone on for so long that one must look askance at the coherence of the plan. The Trump Administration is simultaneously working on sanctioning 40 countries for transhipping Chinese goods. India, Canada and Mexico are part of the 40. To counter the tariff threat, India certainly can pursue strategic trade negotiations, diversify global export markets, and strategically balance its domestic agricultural and energy baselines. These are normal options.

My personal hope -- and belief -- is that India will not buckle at the prospect of 100% tariffs!



To download the latest issue 'Volume 33 Issue 12 - September 25, 2026', click here
Petro Intelligence [FREE Access]
Is India Bartering Away Its Heft?
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Concerns Over Rising LNG Prices Deepen
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LPG: Need To Find Ways To Avoid Future Shocks
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India Must Face Down Trump’s Tariff Threats
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Foreign Investment
Sumitomo To Participate In Renewable Energy Project In India
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Overseas Investment
BPCL Readies $3-Billion Bond ToFund Brazil Oil Project
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Gas Scene
Domestic Natural Gas Scene In July 2026
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Who Owns How Much Share In India’s Natural Gas Pipelines
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India Diversifying LNG Import Sources
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Indian Natural Gas Spot Price for Physical Delivery
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Domestic Natural Gas Production Exceeding Targets?
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Where Does India Figure Globally In LNG Imports?
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A Graphic Presentation Of Domestic Natural Gas Scene in June ’26
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Global Natural Gas Price Trends
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India’s City Gas Distribution (CGD) sector is expanding rapidly
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Updated Graphic Presentation of India’s Natural Gas Consumption and Import Dependency
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Dismal Domestic Natural Gas Scene In June 2026
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India’s Rising LNG import, Rusting Capacity Of Many LNG terminals
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Domestic Natural Gas Scene In May 2026
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Sector-Wise Consumption Of Natural Gas In India
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CGD Sector’s Increasing Share In India’s Natural Gas Consumption
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Data Section
Monthly Upstream Data
Monthly Downstream Data
Historical database
Data Archives
Special Database
BPCL’s Financial Performance Standalone, Consolidated During FY’23 To FY’26
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Consumption Growth Of Petroleum Products Drops In August 2026
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Fall In Import, Export Of Petroleum Products In August 2026
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Diverging Views On Global Oil Demand
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Indian Crude Basket Price In August 2026
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Oil India’s Healthy Reserve Base, Growth In Acreage, Exploratory Drilling
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Diesel’s Dominant Position In Petroleum Products Consumption In India
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Analysis Of Petroleum Products Consumption Trend During The Current FY
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India’s Crude Oil Import Drops In August, 2026
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Refill Affordability Problem Hits PMUY LPG Scheme
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Feedstock-wise Ethanol Production In India
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BPCL’s Three Major Refinery Projects In Progress
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Share Of Various Products In Overall Petroleum Products Consumption In FY 26’
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Specific Energy Consumption In India’s State-Owned Refineries
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India’s Growing Petroleum Marketing Infrastructure
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Increasing Popularity Of PMUY LPG Program
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Tenders [FREE Access]
ONGC
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Vedanta Oil and Gas
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