US Rejection of India's Claim on Tariffs
The United States has rejected India's assertion that American tariffs on steel and aluminium are safeguard measures under World Trade Organization (WTO) rules. The US clarified that these tariffs were imposed under Section 232 for national security reasons.
India's Notification to WTO
- On May 9, India informed the WTO of its right to impose retaliatory duties on certain American products in response to US tariffs on steel and aluminium.
- The US, in its communication dated May 23, stated that there is no basis for India's proposal to suspend concessions or obligations under the WTO Agreement on Safeguards.
US Position on Section 232 Tariffs
- The US maintains that these tariffs are not safeguard measures and, therefore, will not discuss them under the Agreement on Safeguards.
India's Potential Retaliatory Actions
- India's proposed suspension of concessions, which could involve increased tariffs on selected US products, has not been detailed yet.
- In a similar move in 2019, India imposed retaliatory tariffs on 28 US products including almonds, apples, and chemicals.
Comments from Economic Think Tank GTRI
- GTRI argues the US's "national security" rationale makes India's proposed suspension and retaliatory duties legally "invalid".
- Ajay Srivastava of GTRI suggests India might opt to resolve the issue through the ongoing India-US bilateral trade agreement.
- A stronger approach could involve India imposing retaliatory tariffs independently, similar to actions by the EU, Canada, and China.
- Despite several legal and diplomatic options, India might choose not to act immediately.