Trump Cranks Tariffs on India to 50%, Sends Modi a Postcard from Hell

Trump to India: “You two-timing son of a…” 

Diplomats are scrambling and exporters are choking this morning as Donnie Politics just jacked tariffs on Indian goods to a full-blown 50%, doubling down on last week’s 25% smackdown. Why? Because India’s been getting high on supply from Vladimir Putin’s devil juice: Sanctioned oil from Russia. 

(Source: Giphy) 

According to the White House, the 25% kicker will take effect in 21 days, giving just enough time for back-channel panic and emergency Zoom calls between Washington and Delhi. This also comes at a time as frustration in Washington continue to build because Putin still hasn’t signed his “End the War” napkin. And well, congrats India… but you’re the easiest punching bag in the BRICS lineup. As a result, New Delhi responded with somewhat of a middle finger. Modi’s administration said the move was “unjustified” and “unreasonable”. Even Rahul Gandhi, India’s opposition leader and perennial Modi critic, took a break from infighting to call Trump a “bully”... uniting India’s political spectrum in the way only a foreign insult can. 

(Source: Bloomberg) 

Meanwhile, the economic impact is about as subtle as a sledgehammer to a glass export crate. Bloomberg estimates the tariffs could nuke up to 0.9% of India’s GDP, especially hammering labor-intensive sectors like jewelry, textiles, footwear, carpets, and agriculture. Basically all the stuff Americans still buy from India. But it’s not just the goods that are being threatened here. Pharmaceuticals, India’s third-largest export to the U.S., are now in the blast radius. Over $10.5 billion in drug exports are at stake, which could leave America slightly less addicted to Indian generics and more addicted to paying double for the same pill in a new bottle.

(Source: Giphy) 

As for Wall Street? Shrugs all around… for now. The iShares MSCI India ETF barely flinched, down 0.3%, and oil ticked up slightly after a five-day losing streak. One-month dollar-rupee forwards didn’t move. Apparently, the algos aren’t programmed to care unless someone bombs a refinery or Powell changes his tone mid-sentence. Still, this was policy wrapped up in Trump’s Art of Leverage… and everyone knows it. 

For context, Trump hasn’t slapped similar tariffs on China, which buys even more Russian oil. He’s not even hitting Russia itself… yet. Meaning, this is The Don style pressure tactic to force Modi back to the negotiating table after months of stalled trade talks and “no thanks” on U.S. ag imports. It’s a warning shot, not a doctrine. And yet, it might possibly work. However, Modi is reportedly planning a visit to Beijing later this month… his first in seven years, which could be a pivot eastward if this thing spirals. A cornered India, especially with a pissed-off electorate and a rising BRICS agenda, might decide it’s better to kiss the dragon than dance with the elephant.

(Source: Giphy) 

But even still, this is classic “living on the edge” from Trump. And it’s exactly what markets have come to expect from the man who once tried to buy Greenland and is now the proud owner of Gulf of America. So with that, what now?  India scrambles, the White House waits, and Putin smirks while the world burns $100 crude. Only time will tell if India gets their sh*t together. For now though, keep your eyes on any retaliation… and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News holds no positions in companies mentioned in the article.