India has formally notified the World Trade Organisation (WTO) about its intention to impose retaliatory tariffs on certain US-made products in response to the US’s continued levies on Indian steel and aluminium exports. This move underscores rising trade tensions between the two nations, especially after US President Donald Trump reimposed global tariffs earlier this year.
Key Points of the Proposal:
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Nature of the Response: India plans to suspend concessions and increase import duties on select American goods.
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Targeted Products: Specific products originating from the US would face higher tariffs, but the precise items have not been disclosed yet.
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Context: This step is seen as a countermeasure to the US's safeguard tariffs, which impact approximately $7.6 billion worth of Indian exports to the US.
Background:
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The US tariffs on Indian steel and aluminium exports were initially introduced in 2018 under the Trump administration, citing national security concerns. These measures have been a point of contention for India, the world’s second-largest steel producer.
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The proposed retaliatory tariffs aim to put pressure on Washington, using WTO rules as a platform for India's grievances, reflecting broader trade friction between the two countries.
Irony of Timing:
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The move to escalate this issue at the WTO comes at a time when both India and the US are on the verge of finalizing a new trade agreement.
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India is said to have made a significant concession by offering to cut its tariff gap with the US by nearly two-thirds, aiming to push the trade deal across the finish line.
Geopolitical and Trade Implications:
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The retaliation signals a broader effort by India to secure fair treatment of its exports under global trade rules, especially as geopolitical alliances evolve and supply chains are realigned.
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While the tariff proposal is still in the WTO notification stage, its potential escalation could further strain the already complex trade dynamics between India and the US.
This development highlights the balancing act India faces—working to strengthen its trade ties with the US while addressing trade imbalances and seeking a more favorable market for its exports.
