India Plans Trade Retaliation Over US Tariffs

India Plans Trade Retaliation Over US Tariffs

Why in the News ?

India has formally notified the WTO of its intent to suspend concessions to the US following steep tariffs imposed by Washington on steel and aluminium. The US has rejected India’s notice, claiming the tariffs are national security measures, not safeguards.

Background of the Dispute:

• On February 10, the US imposed 25% tariffs on steel and aluminium imports, effective March 12.
• India responded with a May 9 notice to WTO, proposing retaliatory suspension of trade concessions.
• The Trump administration further doubled tariffs to 50% on May 30, citing national security.
• The US insists the measure is not a safeguard, hence WTO talks with India are unwarranted.

India’s Proposed Countermeasures

• India may impose higher duties on US imports like almonds, walnuts, and metals.
• These countermeasures are to be effective from June 8, after the 30-day notice expires.
• India’s WTO notice seeks to suspend obligations under trade rules in proportion to the US tariffs.
• The move aligns with WTO’s dispute redressal framework when negotiations fail.

Global and US Reactions

• The US rejected India’s claim, stating tariffs were for national security, not trade protectionism.
• The European Union also warned of retaliatory measures, criticising the US move.
• The EU said such tariffs undermine negotiations and raise global trade tensions.
• Both India and the EU fear a broader trade war impacting global economic stability.