Treasury Secretary Scott Bessent defended the plan to impose higher tariffs on India over its Russian oil purchases, but not on China, arguing that India's purchase patterns shifted sharply after the invasion of Ukraine.
Less than two weeks ago, President Donald Trump issued an executive order to impose an additional 25% tariff on Indian goods because that country is importing Russian oil, and Russia's actions in Ukraine are "an unusual and extraordinary threat to the national security and foreign policy of the United States." He said that if Russia were to "take significant steps to address the national emergency described in section 1 of this order and align sufficiently with the United States on national security, foreign policy, and economic matters, I may further modify this order."
The president's trade team has been suggesting that its definition of transshipment is different than what the word has traditionally meant -- that they will assign country of origin based on how much of the finished good was made from local inputs.
Once the U.S.-Japan deal is put to paper, Japanese goods will be subject to a flat 15% tariff, as long as the most-favored nation tariff that applies is at that rate or lower. For goods above 15% MFN, just the typical duty will apply, with no additional reciprocal tariff.
A group of trade associations that includes restaurants, wine shops, domestic distillers and bottle providers asked the president to allow European wines and spirits to enter the U.S. duty-free, in the case of spirits, and under most-favored nation rates, for wines, rather than the 15% EU reciprocal tariff rate.
A 40% tariff on transshipped goods could apply to goods that include third-country content above 30%, according to Commerce Secretary Howard Lutnick, speaking on Fox Business Aug. 7.
On Aug. 27, Indian goods that are currently subject to reciprocal tariffs will be tariffed at an additional 25%, on top of the 25% reciprocal tariff set to take effect Aug. 7, the White House announced.
Thompson Hine trade lawyer Dan Ujczo, who has expertise in North American trade and, particularly, automotive trade in the USMCA region, said the way the carve-outs to 25% Section 232 tariffs have been shaking out has surprised him -- and, he believes, has surprised countries that are automaking powerhouses.
Former trade negotiators and government trade advisers from both the Office of the U.S. Trade Representative and Canada described the negotiating process of the last three months as one wherein even Cabinet members couldn't promise that a deal was done.
President Donald Trump, during a call-in interview on CNBC, said that he is going to raise India's 25% reciprocal tariff level "very substantially over the next 24 hours because they’re buying Russian oil, they’re fueling the war machine."