us-rejects-india-s-retaliatory-tariffs-claim-under-wto-rules

The United States has rejected India’s claim that American tariffs on auto and auto parts qualify as safeguard measures under the WTO (World Trade Organisation) rules, asserting instead that the duties are imposed on national security grounds, and hence, can’t invite retaliatory tariffs from India.

“These actions are... not safeguard measures. Accordingly, there is no basis for India's proposal to suspend concessions or other obligations under... the Agreement on Safeguards with respect to these measures,” stated a WTO communication, dated July 17, which was circulated at the request of the US.

The US also said that it will not discuss the Section 232 tariffs under the Agreement as they “do not view the tariffs as a safeguard measure”, referring to the WTO’s Agreement on Safeguards. 

 

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Similarly, it also rejected India’s claim that American tariffs on steel and aluminum are safeguard measures under the WTO rules.

India, meanwhile, has said it is reserving the right to impose retaliatory duties on US tariffs (25 per cent) on automobiles and auto parts, stating that the levies are safeguard measures that are harming its domestic industry.

The proposed suspension of concessions or other obligations, which India has notified, could take the form of increased tariffs on selected US products. While India has not disclosed those items yet, it had imposed retaliatory tariffs on 28 US products, ranging from almonds and apples to chemicals, in 2019.

The US first imposed 25 per cent tariffs on imports of aluminium, steel and derivative articles on March 12. Again, on June 3, the taxes were hiked to 50 per cent.

On July 10, India revised its proposal to impose retaliatory duties against the US over American tariffs on steel and aluminium in view of the further hike in duty by the Trump administration.

An official has said that India's decision to reserve its rights is a procedural move under the WTO rules and it would not affect ongoing negotiations on the proposed trade pact between the two countries.

The Indian team is at present in Washington for the fifth round of negotiations on the proposed bilateral trade agreement.