First Russian Oil, Now American Corn: How US Is Using Tariffs Against India

Even before trade negotiations between India and the United States resumed, Washington continued its arm-twisting tactics, with US Commerce Secretary Howard Lutnick warning that New Delhi could lose its access to the American market if it refuses to purchase US-grown corn. Speaking to Axios in an interview, Lutnick threatened that New Delhi could face a "tough time" if it doesn't bring down its tariffs, even as President Donald Trump himself is dialling down the heat on India.

He claimed the India-US relationship is one-way. "They sell to us and take advantage of us. They block us from their economy, and they sell to us while we are wide open for them to come in (and) take advantage," Lutnick said. 

"India brags that they have 1.4 billion people. Why won't 1.4 billion people buy one bushel of US corn? Doesn't that rub you the wrong way that they sell everything to us, and they won't buy our corn? They put tariffs on everything."

Bushel is a measure of capacity equivalent to 35.2 litres and is used for dry goods.

Lutnick claimed that Donald Trump has asked India to "bring down your tariffs, treat us the way we treat you." He further said the Trump administration has "to right years of wrong, so we want a tariff going the other way until we fix this".

"That's the president's model, and you either accept it or you're going to have a tough time doing business with the world's greatest consumer," he said.

Trump's Tariffs On India

Trump had promised for months that the two sides were close to clinching a trade deal, only to double new tariffs on Indian imports to 50 per cent, sparking questions about the future of the US-India relationship, which had strengthened in recent years, including during Trump's first term. The US levies on Indian imports, including 25 per cent duty for Delhi's purchases of Russian oil, which is among the highest imposed on any country in the world. 

Over the past few weeks, Trump and his top officials have criticised India for buying oil from Russia and said that India was funding the war in Ukraine, a charge New Delhi denies.

India has described the US action as "unfair, unjustified and unreasonable". Defending its purchase of Russian crude oil, India has been maintaining that its energy procurement is driven by national interest and market dynamics.

India-US Trade Deal

After weeks of diplomatic friction, Trump last week said his administration is continuing negotiations to address trade barriers with India and that he would talk to Prime Minister Narendra Modi, in a sign of a thaw in the India-US ties.

Trump, in a marked shift of tone, said he looked forward to speaking to Modi in the "upcoming weeks" and expressed optimism that they could finalise a trade deal. Prime Minister Narendra Modi responded to the US President's friendly overture with both leaders expressing mutual goodwill.

Following this, reports said US trade negotiators are due to arrive in New Delhi for further talks later this week. But even before the negotiations resumed, Lutnick laid down new conditions.

Why Push For Corn Trade

According to a report by the BBC, US agricultural groups have warned that American farmers are facing widespread difficulty this year, mostly due to economic tensions with China. 

Since April, Beijing and Washington have been locked in a trade war, causing a sharp fall in the number of Chinese orders for American crops. This has resulted in American farmers filing small business bankruptcies, the number of which has reached a five-year high, according to data compiled by Bloomberg in July.

Though the US and China are engaged in trade talks, negotiators face the challenge of stabilising an uneasy truce while addressing disputes over technology access, tariffs and rare earth exports. While Washington sorts out its trade negotiations with Beijing, the Trump administration seems to be forging a new market for American farmers -- one of Trump's largest voter bases -- in India.