US Urges EU to Impose Up to 100% Tariffs on India and China
US President Donald Trump has reportedly asked the European Union to impose tariffs of up to 100% on India and China for purchasing Russian crude oil. The move is intended to increase economic pressure on Moscow to end the war in Ukraine. According to the Financial Times, a US official stated Washington was prepared to "mirror" any tariffs imposed by the EU. This demand comes amid a downturn in US-India trade relations and challenges India's policy of buying discounted Russian oil to meet its energy needs.
Unpacked:
India relies on Russian oil for economic reasons: it imports about 90% of its oil, is highly sensitive to global prices, and uses discounted Russian crude to manage inflation and keep energy affordable. India also cites national interest and strategic autonomy as reasons for maintaining these imports, despite Western pressure.
Estimates of India's annual savings from discounted Russian oil vary, but recent research suggests the net benefit is about $2.5 billion per year—much less than some media reports. These savings are modest compared to India’s $4 trillion GDP and are mainly captured by refiners rather than directly passed on to consumers.
If the US and EU impose high tariffs, India risks losing access to major export markets, threatening nearly 55% of its merchandise exports to the US (worth over $87 billion annually). The negative impact on trade, investment, and reputation could far outweigh the fiscal relief from discounted Russian oil.
China and India have become the biggest buyers of Russian crude, with China purchasing 47% and India 38% of Russia’s crude exports in mid-2025. Their continued imports provide Russia with crucial revenue, undermining the effectiveness of Western sanctions aimed at limiting Moscow’s war funding.