World Economy

India Hits Back at US With Tariffs

India Hits Back at US With TariffsIndia Hits Back at US With Tariffs

Responding to the US import tariffs on certain steel and aluminum products, India has decided to suspend concessions on 30 products being imported from the US.

In a notification to the World Trade Organization on June 14, India emphasized that the tariffs will be substantially equivalent to the amount of trade affected due to the US’ measures. The products are likely to include motorcycles, certain iron and steel goods, boric acid and lentils, PTI reported.

“The proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the United States, based on the measures of the United States,” the notification read. “India wishes to clarify that suspension of concessions shall be equivalent to the amount of trade affected by the United States’ measures.”

“India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the US,” it added.

US’ decision to hike import duties will have an impact of about $241 million—$198.6 million on steel and $42.4 million on aluminum. India exports only about 4% of its steel and 2% of aluminum to the US. India is looking to hit back with tariffs amounting to the same.

India notified WTO of its decision to suspend concessions to US on 30 products, after safeguard measures imposed by US on imports of certain articles.

The move is significant as it comes a day after Commerce Minister Suresh Prabhu returned from the US and just weeks ahead of further talks between the two countries on the issue.

The decision to begin retaliatory measures against the US, however, is particularly surprising because Prabhu, on his return from the US on Friday, indicated that the two countries would try to resolve their issues through dialogue.

“If they wanted to take fresh action, they would not agree to talks and we would not either do the same,” Prabhu told reporters on Friday. “Instead of measures and countermeasures, we decided to talk and resolve it out.”

Earlier this year, US President Donald Trump announced a 25% and 10% tariff on imported steel on aluminum respectively from all countries, except Canada and Mexico. US is the world’s largest steel-consuming nation. Trump’s announcement, in line with his America first policy, sparked fears of a trade war after countries began mulling imposition of their own tariffs.

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