Today President Trump's envoy Steve Witkoff had a three hour meeting with President Putin of Russia. There is no announcement yet of the outcome of the talk.
But shortly after the meeting was over President Trump amended this Executive Order:
ADDRESSING THREATS TO THE UNITED STATES BY THE GOVERNMENT OF THE RUSSIAN FEDERATION
I have received additional information from various senior officials on, among other things, the actions of the Government of the Russian Federation with respect to the situation in Ukraine. After considering this additional information, among other things, I find that the national emergency described in Executive Order 14066 continues and that the actions and policies of the Government of the Russian Federation continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.
To deal with the national emergency described in Executive Order 14066, I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil. In my judgment, imposing tariffs, as described below, in addition to maintaining the other measures taken to address the national emergency described in Executive Order 14066, will more effectively deal with the national emergency described in Executive Order 14066.
Sec. 2. Imposition of Tariffs. (a) I find that the Government of India is currently directly or indirectly importing Russian Federation oil.
(b) Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 percent.
How a total 50% tariff on products from India is supposed to counter alleged threats to the United States by the government of Russia is hard to explain.
The increased tariff on India will come into force in 21 days.
India's President Narneda Modi has not yet commented on it. He will however visit China at the end of this month:
According to the plan, Prime Minister Modi will embark on a visit to Japan around August 29 and after concluding the trip, he will travel to the northern Chinese city of Tianjin for the SCO summit to be held from August 31-September 1.
Modi's visit to China is being planned amid efforts by the two sides to repair their bilateral ties, which came under severe strain following the deadly clashes between Indian and Chinese troops in Galwan Valley in June 2020.
The grand U.S. plan of luring India deeper into the Quad alliance to fight China is likely dead. The leaders of the two biggest nations on this globe, plus Russia, will sit together and plan how to avoid further dealing with an unstable U.S. of A.
Baring any change the additional tariffs on India will hit U.S. consumers the most. The largest portion of goods coming from India to the U.S. are active pharma ingredients (API) used in generic medicines:
The US is India’s largest destination for pharma exports, accounting for over 31 per cent of the country’s total pharmaceutical exports. As much as 47 per cent of all generics consumed in the US are imported from India.
Imports from India are unlikely to stop. But it will be U.S. consumers who will have to pay the higher prices:
[T]he US will still be dependent on countries like India since the cost of manufacturing certain drugs in the US would be at least six times compared to that of manufacturing the same product in India, say industry sources.
The US market, which relies heavily on India for APIs and low-cost generics, would struggle to find alternatives, according to Namit Joshi, chairman of Pharmexcil (Pharmaceuticals Export Promotion Council of India). “Efforts to shift pharmaceutical manufacturing and API production to other countries or within the US will take at least 3-5 years to establish meaningful capacity,” he was quoted in media reports.
The price increase for medicines will contribute to an already stubborn inflation within the U.S., even while the president tries to bully pharma producers into reducing their prices.
There are other parts of the economy where Trump's policies collide with themselves.
Wired reports that the number of drill rigs for gas and oil exploration continues to shrink even while Trump loudly promises to 'Drill, baby drill':
There is one key indicator of drilling levels that the industry has watched closely for more than 80 years: a weekly census of active oil and gas rigs published by Baker Hughes. When Trump came into office on Janunary 20, the US rig count was 580. Last week, the most recent figure, it was down to 542—hovering just above a four-year low reached earlier in the month.
…
The Federal Reserve Bank of Dallas’ quarterly survey of over 130 oil and gas producers based in Texas, Louisiana, and New Mexico, conducted in June, suggests the industry’s outlook is pessimistic. Nearly half of the 38 firms that responded to this question saw their firms drilling fewer wells this year than they had earlier expected.Survey participants could also submit comments. One executive from an exploration and production (E&P) company said, “It’s hard to imagine how much worse policies and DC rhetoric could have been for US E&P companies.” Another executive said, “The Liberation Day chaos and tariff antics have harmed the domestic energy industry. ‘Drill, baby, drill’ will not happen with this level of volatility.”
Roughly one in three survey respondents chalked up the expectations for fewer wells to higher tariffs on steel imports. And three in four said tariffs raised the cost of drilling and completing new wells.
“They’re getting more places to drill and they’re getting some lower royalties, but they’re also getting these tariffs that they don’t want,” Rapier said. “And the bottom line is their profits are going to suffer.”
Inflation in the U.S. continues to be stubborn and is likely to rise. Unemployment is up while services and manufacturing activities are shrinking. The government is spending excessively.
These are all signs of stagflation which, once it sets in, has proven difficult to defeat.