Economist Peter Schiff warned Tuesday that President Donald Trump's decision to double tariffs on Indian imports to 50% could "expose the U.S. consumer as a paper tiger," predicting a dollar crash that would "impoverish Americans but enrich foreign consumers, particularly the BRICs."
What Happened: "Inports from India now face 50% tariffs. Trump may end up exposing the U.S. consumer as a paper tiger. A dollar crash will impoverish Americans but enrich foreign consumers, particularly the BRICs. The death of the U.S. consumer means the birth of the emerging-market consumer," Schiff wrote on X.
Trump announced the extra 25% levy late Monday, lifting total duties to 50% after accusing New Delhi of buying discounted Russian oil and selling it on the open market for big profits. The move follows a week-old Truth Social post in which the president vowed to "substantially raise" tariffs if India kept purchasing Russian crude.
India’s Ministry of External Affairs called the penalty "extremely unfortunate," noting that Washington initially encouraged the oil trade to steady markets after Moscow's 2022 invasion of Ukraine. Officials added that the West still does far more business with Russia than India does.
Why It Matters: The tariff hike rattled Mumbai-listed exporters, with textile shares slipping after markets opened Wednesday, according to the Economic Times. Bloomberg reported the new rate takes effect on August 27. Meanwhile, Reuters said the White House left the door open to further "penalties" if India fails to curb its oil buys.
Critics across the aisle echoed cost concerns. Former U.N. ambassador Nikki Haley said punishing a "strong ally" like India while pausing some tariffs on China "makes no sense."
However, the U.S. administration is firm on its stand and also preparing to monitor other nations for similar ties with Russia. If found, they too could face a 25% tariff under the same executive framework.
India increased its Russian oil imports by 17.4% in June, importing approximately 2 million barrels per day, according to Reuters. In 2024, the United States purchased $91.2 billion in goods from India, with electrical products, pharmaceuticals, pearls, and metals accounting for more than one-third of the total, according to U.N. trade data.
Photo Courtesy: esfera on Shutterstock.com
Read Next:
