India mulls tariff hike on 20 US products to hit back in steel, aluminium duties row

In a retaliatory move, India has told the WTO that it proposes to raise duties by up to 100 per cent on 20 products such as almonds, apple and specific motorcycles imported from the US from next month, if Washington does not roll back high tariffs on certain steel and aluminium items.  The additional duty proposed to be hiked on these items ranges from 5 per cent to 100 per cent. "India hereby notifies the Council for Trade in Goods of its decision to suspend concessions or other obligations ... That are substantially equivalent to the amount of trade affected by the measures imposed by the United States," according to a communication by India to WTO. 

It said that the proposed suspension of concessions would be in the form of "an increase in tariffs on selected products originating in the US".  It also said that India reserves its right to further suspend substantially equivalent concessions and other obligations based on the measures of the US.  India has earlier urged the US to exempt it from the decision to raise import duties on certain steel and aluminium products.

The country has proposed this move under the WTO's Agreement on Safeguards.  On March 9, US President Donald Trump imposed heavy tariffs on imported steel and aluminium items, a move that has sparked fears of a global trade war.  Trump signed two proclamations that levied a 25 per cent tariff on steel and a 10 per cent tariff on aluminium imported from all countries except Canada and Mexico. 

"The suspension will come into effect earlier than 21 June, 2018, in case the US decides to continue the period of application of the measures...The suspension of concessions will continue to apply until the United States' safeguard measures are lifted," it added.  India has also stated that America imposed definitive safeguard measures without giving affected members any opportunity for consultations. 

"India wishes to clarify that suspension of concessions shall be equivalent to the amount of trade affected by the US's measures. To this end, India reserves the right to adjust the specific products for which suspension of concessions is effectuated, and its right to adjust the additional rate of duty imposed on such products," it said. The country has said that the duty imposed by America has affected steel exports by USD 134.4 million, while the same on aluminium was USD 31.16 million. 

The 20 items include peas, chickpeas, fresh apple, walnut, soybean oil, refined palmolein, coco powder, chocolate products, golf car, Motor cycle with engine capacity over 800 cc and other goods vehicles, with spark-ignition internal combustion piston engine. The US has however stated that the duty hike by Trump administration is not a safeguard measure. India has also dragged the US to the World Trade Organisation's dispute settlement mechanism over the imposition of import duties on steel and aluminium. 

India has stated that the decision will impact exports of these products to the US and it is not in compliance with global trade norms. India's exports of steel and aluminium products to America stood at about USD 1.5 billion every year. India's exports to the US in 2016-17 stood at USD 42.21 billion, while imports were USD 22.3 billion.