Seeds of Wisdom RV and Economic Updates Tuesday Afternoon 8-5-25
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Trump Threatens Major Tariff Hike on India Over Russian Crude Imports
U.S.-India energy tensions escalate as Trump links trade penalties to continued Russian oil purchases
Trump Ties Tariffs to Russian Crude Trade
On Monday, U.S. President Donald Trump announced plans to “substantially raise tariffs” on Indian exports, citing India’s continued import and resale of Russian crude oil. The statement, published on Truth Social, marks the first direct linkage between U.S. trade penalties and India’s energy sourcing from Russia, according to Reuters.
Trump criticized India for purchasing “massive amounts” of Russian oil and profiting from resales while remaining “indifferent to Ukrainian deaths.” While no specific tariff categories were detailed, aides cited by Fortune warned that the new trade measures would be “very large, very soon.”
India’s Deepening Energy Ties with Russia
Despite mounting U.S. scrutiny and the threat of secondary sanctions, India has maintained Russian crude imports at over 1.5 million barrels per day throughout the summer.
Trade data cited by TRT World shows India’s imports from Russia surged from $9 billion in 2021 to over $64 billion in 2024, with discounted oil making up the vast majority of that increase.
To bypass sanctions and payment restrictions, Indian refiners have:
Used rupee-based transactions
Relied on direct Russian tankers
Engaged third-party trading houses
At least four Russian-flagged, sanctioned tankers are reportedly anchored off India’s western coastline, unable to unload due to legal uncertainty — reflecting the growing operational risks tied to this trade.
Delhi Silent as Washington Ramps Up Pressure
India’s Ministry of External Affairs has not responded to Trump’s comments. In previous statements, however, Indian officials have emphasized the country's need for “strategic autonomy” and energy security, defending Russian crude purchases as a cost-effective, large-volume solution.
No formal timeline for the proposed U.S. tariff increases has been announced.
Ripple Effects for Indian Refiners
Trump’s threat adds fresh uncertainty for Indian refiners, many of whom are now:
Reevaluating payment methods
Switching flag registries for oil tankers
Revising ship-to-ship transfer routes
Some Russian barrels are being re-routed through intermediaries in Fujairah (UAE) and Singapore, while U.S. Treasury advisories have triggered stricter due diligence from Indian shipping agents and insurers.
Even a symbolic tariff hike could have outsized effects by chilling third-party financing, delaying cargo insurance, and tightening liquidity access for Indian energy firms operating in gray-market supply chains.
Geopolitical Implications
This latest development underscores the fragile energy-trade balance between Washington and New Delhi. As Trump’s second term advances, India’s ties with Russia could become a central flashpoint in broader geopolitical realignment — especially if U.S. tariffs begin targeting core sectors like refined fuels, pharmaceuticals, and textiles.
Analysts warn that beyond economic implications, the tariffs could complicate:
BRICS coordination on de-dollarized oil settlement
Global South alliances navigating post-Ukraine energy trade
India’s future role in U.S.-led Indo-Pacific security frameworks
@ Newshounds News™
Source: OilPrice
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BRICS Oil Purchases from Russia Are Legal Under International Law, Says Source
Despite U.S. tariffs and threats, BRICS nations continue buying discounted Russian crude within approved price caps
Trump’s Sanctions Strategy Backfires as BRICS Defies Tariff Pressure
Since the U.S. imposed sanctions on Russia in February 2022, BRICS nations have steadily increased their purchases of Russian oil, drawing billions of dollars in energy savings. Despite U.S. attempts to isolate Moscow economically, countries like India and Brazil have intensified crude imports — even in the face of 25% tariffs and additional penalties from President Donald Trump.
India, in particular, has saved nearly $7 billion in foreign exchange costs by acquiring deeply discounted Russian crude, according to government trade data. These actions, perceived by some as defiance of U.S. policy, prompted Trump to publicly warn both India and Brazil: stop buying Russian oil or face further economic consequences.
India Responds: Oil Purchases Are Fully Legal
An unnamed source within the Reserve Bank of India (RBI) told TASS that BRICS nations are not violating international law by continuing oil trade with Russia. The official emphasized that the U.S. sanctions on Russian oil included a recommended price cap of $60 per barrel, and India has complied with this limit.
“India’s purchases of Russian oil have remained completely legal and within international norms,” the source stated. “Russian oil has never been subject to outright sanctions, nor is it currently banned by the U.S. or EU. Oil companies have consistently followed the $60 per barrel price cap recommended by the United States.”
The RBI official added that Trump’s latest tariffs contradict his own administration’s sanction framework, creating confusion among U.S. allies and trade partners alike.
Geopolitical Implications: BRICS Asserts Autonomy
India and Brazil’s continued engagement with Russian energy markets signals a broader BRICS strategy of asserting strategic autonomy. Rather than folding under pressure from Washington, these nations appear increasingly emboldened to pursue energy security on their own terms.
Analysts point out that:
India has routed much of its Russian oil via intermediaries, using currencies such as the rupee and Chinese yuan to settle payments.
Brazilian refineries have also increased uptake of discounted Russian barrels amid domestic fuel inflation.
Neither country has shown signs of reducing imports despite U.S. threats of escalating tariffs.
Why Russian Oil Isn’t Technically Sanctioned
The confusion lies in how sanctions have been structured. Rather than banning Russian oil outright, the U.S. and EU agreed on a price-cap mechanism that allows purchases below $60 per barrel. This workaround was intended to:
Limit Moscow’s revenue from oil sales
Prevent global supply shocks
Maintain access for developing nations to affordable energy
BRICS countries — especially India, China, Brazil, and South Africa — have used this mechanism to legally continue importing Russian crude, framing their actions as compliant with global frameworks and essential for national economic growth.
Conclusion: Tariff Escalation Likely to Face Global Pushback
While Trump’s tariffs may appeal to domestic political audiences, they risk fracturing long-standing alliances and trade relations with key BRICS economies. If the U.S. moves to punish legal oil transactions that abide by its own sanctions guidelines, it could trigger:
Formal WTO disputes
Retaliatory tariffs
Stronger BRICS coordination on alternative energy payment systems
For now, BRICS officials appear resolute: buying Russian oil under the price cap is legal — and they intend to keep doing it.
@ Newshounds News™
Source: Watcher Guru
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