(Washington) While customs duties of 50 % on Brazilian products came into force on Wednesday, before the rest of the world on Thursday, Donald Trump added an additional 25 % on Indian products, accusing New Delhi its Russian oil purchases.
This new surcharge is added to that of 25 % which must come into force Thursday, at the same time as the customs duties that Donald Trump presents as “reciprocal”, and will only be effective in 21 days, according to a decree of the American president. It will not apply to a certain number of products, which significantly reduces its scope.
This measure aims to reduce Moscow’s ability to finance the conflict in Ukraine, presented in the decree as “an unusual and extraordinary threat to national security and foreign policy of the United States”.
In a statement, the Indian Ministry of Foreign Affairs judged this surcharge “extremely regrettable”, stressing that “several other countries” buy Russian oil “in their own national interest”.
After China, India is the main Russian customer for its oil, which represented in 2024 almost 36 % of Indian imports in this area, against around 2 % before the start of the war, in 2022, according to data from the Indian Ministry of Commerce.
“This marks a low point in Indo-American relations,” said South Asia Initiative Director Farwa Aamer. “India does not want to question its relations with Russia”, but will be under pressure to find a solution with Washington.
This decree occurs less than 24 hours before the entry into force of customs duties targeting most of the United States’s business partners and that Donald Trump justifies the need to rebalance the exchanges.
Several dozen of them must indeed see the surcharges applied to their products increase significantly Thursday at 0.01 local (0 h 01 hour in the east) when they enter US territory, with a range ranging from 10 % to 41 %, Syria being the country targeted by the highest rate.
For India, the rate applied to its products entering the United States will initially be 25 %.
Brasilia puts the impact into perspective
The additional 25 % planned by the new decree would bring it to the level of the rate in force since Wednesday on Brazilian products, or 50 %.
While Brazil should not initially be affected by customs duties beyond the 10 % floor now applying on a large part of the products imported into the United States, Donald Trump announced his intention to impose a surcharge of 50 %, the highest applied to a particular country.
The American president criticizes the Brazilian justice for continuing ex-President Jair Bolsonaro, accused of an attempted coup after his defeat during the presidential election of 2022.
These prosecution, qualified by Donald Trump as “witch hunt”, also led to American sanctions against one of the judges of the Brazilian Supreme Court, Alexandre de Moraes.
PHOTO ADRIANO MACHADO, ARCHIVES REUTERS
Judge Alexandre de Moraes
If customs duties have aroused a strong reaction from Brasilia, President Luiz Inácio Lula da Silva denouncing an attack on the “sovereignty” of his country, the Brazilian capital has put into perspective the impact of surcharge.
Due to the many exemptions provided by the decree, only 36 % of the country’s exports to the United States are really concerned, according to the Brazilian government.
However, he announced that he had seized the World Trade Organization (WTO) on the subject.
The United States is an important partner for Brazilian companies, but not essential: certainly, it is the second market in Brazil, with 12 % of exports, but this remains very behind what China represents today, where more than a quarter of Brazilian exports are leaving.
Certain important sectors, such as coffee, are however more exposed to the American market and are applied the surcharge by 50 %.
In total, new customs surcharge should bring the average effective rate to almost 20 % in the United States on Thursday, according to analysts at Pantheon Macroeconomics. This would constitute the highest rate applied to imported products since the early 1930s, according to the LAB budget of the University of Yale.
