India's Bold Move Against US Tariffs

In a significant escalation of trade tensions, India has proposed imposing retaliatory tariffs on US products, responding to American safeguard measures on steel and aluminium imports. This decision comes as both nations are deeply engaged in bilateral trade negotiations, highlighting the complexities of international trade relations.

The Financial Impact

According to a formal communication to the WTO, the US tariffs, extended earlier this year, affect Indian exports worth $7.6 billion, potentially leading to a duty collection of approximately $1.91 billion. India's response is to suspend equivalent trade concessions by imposing similar duties on imports from the US.

Legal and Trade Norms

The US initially imposed these tariffs in March 2018, citing national security concerns. However, India argues these measures are inconsistent with global trade norms, including the GATT 1994 and the Agreement on Safeguards, and has sought consultations under the WTO's dispute settlement framework.

Timing and Bilateral Talks

This proposal coincides with ongoing India-US bilateral trade negotiations. Despite the potential for these retaliatory measures to cast a shadow over discussions, both countries continue their dialogue, underscoring the delicate balance between national interests and international cooperation.

Historical Context

This isn't the first time India has retaliated against US tariffs. In June 2019, India imposed higher tariffs on 28 US products, including almonds and apples, following the initial steel and aluminium duties by the US in 2018.

Future Steps

India reserves the right to adjust its tariffs or targeted products based on future developments, indicating a flexible yet firm stance in protecting its trade interests on the global stage.