Key Takeaways
- The U.S. has imposed an additional 25% tariff on Indian goods, citing India's continued purchase of Russian oil, potentially raising total duties to 50% on some items.
- U.S. crude oil inventories experienced a significant draw of 3.029 million barrels for the week ending August 1, contributing to a rise in oil prices.
- The Trump administration is advising nations to reject limits on plastic production in ongoing UN treaty negotiations, aligning with an "America First" policy.
- Birmingham Airport's runway was temporarily closed following an emergency landing by a light aircraft, disrupting all flights.
- The Philippines and India have formalized a strategic partnership aimed at deepening trade and defense cooperation, with bilateral trade reaching $3.53 billion.
US Imposes Steep Tariffs on India Over Russian Oil Purchases
The United States has escalated trade tensions with India, with President Donald Trump signing an executive order to impose an additional 25% tariff on Indian goods. This move comes in direct response to India's continued procurement of Russian oil, which the Trump administration views as "fuelling the (Russian) war machine." This new tariff is set to take effect 21 days from August 6, 2025, potentially increasing the total tariff burden on some Indian exports to 50% when combined with existing duties.
Trump criticized India for maintaining "far too high" tariffs on U.S. imports and for an unbalanced trade relationship where India "do[es] a lot of business with us, but we don't do business with them." India's reliance on Russian oil has significantly increased, now accounting for 35-40% of its total crude imports, a stark rise from just 0.2% prior to the Russia-Ukraine conflict.
The tariffs are expected to impact nearly $64 billion worth of Indian exports to the U.S., potentially leading to price disadvantages and export losses. Furthermore, analysts suggest that if India is compelled to reduce its Russian crude purchases, its yearly oil import expenses could surge by an estimated $9-11 billion. Despite the U.S. pressure, Indian officials have indicated that they will continue to purchase Russian oil, basing decisions on "price, grade of crude, logistics and economic factors," and have called the U.S. move "unjustified."
Oil Prices Climb Amid Inventory Draw
Global oil prices saw an uptick following the U.S. tariff announcement on India and significant drawdowns in U.S. crude inventories. The latest data from the U.S. Department of Energy (DoE) for the week ending August 1 showed a substantial decrease of 3.029 million barrels in crude oil inventories, contrasting with an estimated zero change and a previous week's build of 7.698 million barrels.
Distillate stockpiles also fell by 565,000 barrels, defying an estimated increase. Gasoline inventories dropped by 1.323 million barrels, exceeding the estimated 1 million barrel decline. While crude stocks at Cushing, Oklahoma, increased by 453,000 barrels, refinery utilization saw a notable rise of 1.50%. The decline in overall U.S. crude inventories signals a recovery in demand, further supporting the rise in oil prices.
Trump Administration Takes Stance on UN Plastics Treaty
The Trump administration has advised nations to dismiss a proposed UN Plastics Treaty that would limit plastic production and chemical additives. This stance, consistent with an "America First" foreign policy, prioritizes reducing plastic pollution without imposing "onerous restrictions on producers that would hinder U.S. companies."
This position puts the U.S. in direct opposition to over 100 countries advocating for an ambitious global treaty that includes legally binding obligations and limits on plastic production. Negotiations for the treaty failed to reach an agreement by the end of 2024 and have been extended into the current year.
Birmingham Airport Runway Closed Due to Emergency Landing
Birmingham Airport experienced significant disruption with the temporary closure of its runway following an emergency landing by a light aircraft. All flights were suspended, with some being rerouted to alternate airports. The incident involved a twin-engined Beech King Air that declared an in-flight emergency. The runway is expected to remain closed until approximately 6:00 PM UTC on August 6.
India and Philippines Forge Strategic Partnership
In a move to bolster economic and defense ties, the Philippines and India have announced an upgraded strategic partnership. Philippine President Ferdinand Marcos Jr. and Indian Prime Minister Narendra Modi formalized the alliance during talks in New Delhi.
Bilateral trade between the two nations reached $3.53 billion in the fiscal year 2023-2024, an increase from $3.05 billion the previous year. The partnership aims to deepen cooperation across various sectors, including trade, defense, maritime security, information technology, pharmaceuticals, agriculture, and tourism. President Marcos has also invited Indian tourists to visit the Philippines, while India will offer visa-free entry for Filipinos, further facilitating economic and people-to-people exchanges.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.