India-US WTO Tussle: The Core Issue

The United States has recently informed the World Trade Organization (WTO) that India lacks a 'legal basis' to impose retaliatory tariffs in response to American duties on automobiles, steel, and aluminium. This development comes as both nations are engaged in crucial trade deal discussions, highlighting the tension between advancing bilateral relations and protecting domestic industries.

The dispute traces back to March 8, 2018, when the US imposed protective tariffs on certain steel and aluminium items, citing national security concerns. India argues these measures adversely affect its exports, estimating a significant financial impact. The US, however, defends its position, stating the tariffs are justified under WTO rules for national security.

Trade Deal on the Horizon?

Despite the ongoing WTO dispute, India and the US are making progress towards a bilateral trade agreement. Reports suggest that the US is offering India tariff rates below 20%, aiming to finalize a deal before President Trump's August 1 deadline. However, contentious issues like agriculture and dairy products may be excluded from the interim agreement.

As negotiations continue, the outcome of these discussions could set a precedent for how trade disputes are resolved under the current global economic order, especially those involving national security justifications.