{"id":46979,"date":"2025-05-22T16:19:49","date_gmt":"2025-05-22T10:49:49","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=46979"},"modified":"2025-06-30T11:15:19","modified_gmt":"2025-06-30T05:45:19","slug":"india-to-impose-retaliatory-tariffs-on-u-s-imports-amid-trade-dispute","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/india-to-impose-retaliatory-tariffs-on-u-s-imports-amid-trade-dispute\/","title":{"rendered":"India to Impose Retaliatory Tariffs on U.S. Imports Amid Trade Dispute"},"content":{"rendered":"<h2>India-U.S. Trade Dispute Latest News<\/h2>\n<ul>\n<li>In response to the U.S. imposing 25% tariffs on steel and aluminium imports in March, India has notified the WTO of its plan to impose tariffs on $7.6 billion worth of U.S. imports.\u00a0<\/li>\n<li>The move aims to recover an estimated $1.91 billion in losses suffered by Indian exporters.\u00a0<\/li>\n<\/ul>\n<h2>Reinstatement of U.S. Tariffs on Indian Steel and Aluminium<\/h2>\n<ul>\n<li>In March 2025, U.S. President Donald Trump, in his second term, reimposed 25% tariffs on all imports of steel and aluminium, eliminating earlier exemptions.\u00a0<\/li>\n<li>The move aimed to protect U.S. domestic industries from \u201cunfair trade practices\u201d and \u201cglobal excess capacity.\u201d<\/li>\n<\/ul>\n<h3>Historical Context: Tariff Measures During Trump\u2019s First Term (2018)<\/h3>\n<ul>\n<li>Trump first introduced 25% tariffs on steel and 10% on aluminium in March 2018.\u00a0<\/li>\n<li>These protectionist measures were part of his &#8220;America First&#8221; economic approach.<\/li>\n<\/ul>\n<h3>Temporary Easing Under Joe Biden (2021\u20132023)<\/h3>\n<ul>\n<li>After Joe Biden assumed office in 2021, trade tensions eased.\u00a0<\/li>\n<li>During PM Modi\u2019s U.S. visit in September 2023, the U.S. pledged to provide greater market access to Indian steel and aluminium as a gesture following India\u2019s withdrawal of earlier retaliatory duties imposed in 2019.<\/li>\n<\/ul>\n<h3>Return to Protectionism in 2024<\/h3>\n<ul>\n<li>With Trump\u2019s return to the presidency in 2024, the earlier tariffs were reinstated, this time setting both steel and aluminium duties at 25%.<\/li>\n<\/ul>\n<h3>India\u2019s Retaliation in 2019 Post-GSP Removal<\/h3>\n<ul>\n<li>India had earlier retaliated in June 2019 when the U.S. revoked India\u2019s Generalised System of Preferences (GSP) benefits.\u00a0\n<ul>\n<li>GSP is a unilateral trade measure where developed countries offer preferential tariff treatment to developing countries, often by reducing or eliminating tariffs on specific products.<\/li>\n<\/ul>\n<\/li>\n<li>India responded by imposing tariffs on 28 U.S. imports, including apples, almonds, and walnuts.<\/li>\n<\/ul>\n<h2>Dispute Over Nature of Tariffs<\/h2>\n<ul>\n<li>India disputes the U.S. claim that the tariffs on steel and aluminium are based on national security concerns.<\/li>\n<li>The U.S. argues its actions fall under GATT 1994\u2019s security exception and are not \u201csafeguards.\u201d<\/li>\n<li>India, along with the EU, China, and the U.K., disagrees and views the tariffs as safeguard measures, which have different legal obligations under WTO rules.<\/li>\n<\/ul>\n<h3>Lack of Mandatory Consultations<\/h3>\n<ul>\n<li>India has pointed out that the mandatory pre-consultations required under the Agreement on Safeguards (AoS) were not conducted.<\/li>\n<li>According to India, this procedural lapse violates WTO obligations.<\/li>\n<\/ul>\n<h3>Right to Suspend Concessions<\/h3>\n<ul>\n<li>Citing the adverse impact on its trade, India has reserved its right to suspend trade concessions or obligations toward the U.S.<\/li>\n<li>India has stated it will take measures that are \u201csubstantially equivalent\u201d to the negative effects caused by the U.S. tariffs.<\/li>\n<\/ul>\n<h2>Concerns Over Competitiveness<\/h2>\n<ul>\n<li>Indian exporters had expressed worry that U.S. tariffs would make their products costlier and uncompetitive.<\/li>\n<li>In 2018, India faced disadvantage compared to countries that had received exemptions from the U.S. tariff regime.<\/li>\n<li>The current regime offers no exemptions, leveling the field but still raising pricing concerns.<\/li>\n<\/ul>\n<h3>Sharp Decline in Steel Exports<\/h3>\n<ul>\n<li>The impact of U.S. tariffs on India\u2019s steel exports was substantial:\n<ul>\n<li>Exports to the U.S. dropped by 48.4% in FY 2019-20 and 46.7% in FY 2020-21.<\/li>\n<li>U.S. share in India\u2019s steel exports fell from 3.3% (2017-18) to 2.5% (2018-19).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Recent Recovery in Exports<\/h3>\n<ul>\n<li>Despite past declines, FY 2024-25 has seen a 44.21% rise in steel exports until February.<\/li>\n<li>This follows a 42.3% decline in FY 2023-24, indicating recent resilience despite global challenges.<\/li>\n<\/ul>\n<h3>Industry Calls for Caution<\/h3>\n<ul>\n<li>Leading producers like SAIL have warned of global market volatility due to U.S. protectionist policies.<\/li>\n<li>There are fears of retaliatory tariffs affecting the global trade balance.<\/li>\n<\/ul>\n<h3>Limited Gains for the U.S.<\/h3>\n<ul>\n<li>Ironically, the U.S. tariffs did not benefit its own economy significantly.<\/li>\n<li>A 2019 analysis by the Federal Reserve found only a \u201csmall boost\u201d in manufacturing jobs.<\/li>\n<li>These gains were offset by higher input costs and the negative effects of retaliatory tariffs.<\/li>\n<\/ul>\n<h2>A Strategic and Calibrated Response<\/h2>\n<ul>\n<li>India\u2019s WTO action is seen as strategic rather than reactive.<\/li>\n<li>India\u2019s approach is \u201crules-based and calibrated\u201d, contrasting with the U.S.\u2019 unilateralism.<\/li>\n<li>This positions India as a defender of multilateral trade norms, enhancing its reputation in global trade forums.<\/li>\n<\/ul>\n<h3>Alignment with &#8216;Make in India&#8217;<\/h3>\n<ul>\n<li>The move reflects India\u2019s tougher stance on politically sensitive sectors like steel and aluminium.<\/li>\n<li>This assertiveness aligns with the Make in India initiative, aimed at boosting domestic industry and reducing foreign dependency.<\/li>\n<\/ul>\n<h2>India-U.S. Trade Dispute FAQs<\/h2>\n<p><strong>Q1.<\/strong>\u00a0Why is India imposing tariffs on the U.S.?<\/p>\n<p><strong>Ans.<\/strong>\u00a0To recover losses from U.S. tariffs on steel and aluminium and assert trade rights under WTO norms.<\/p>\n<p><strong>Q2.<\/strong>\u00a0How much will India target in tariffs?<\/p>\n<p><strong>Ans.<\/strong>\u00a0India will impose tariffs on $7.6 billion worth of U.S. imports, reflecting equivalent trade damage.<\/p>\n<p><strong>Q3.<\/strong>\u00a0What legal basis does India use?<\/p>\n<p><strong>Ans.<\/strong>\u00a0India argues the U.S. measures are safeguard-like and failed required consultations, violating WTO&#8217;s Agreement on Safeguards.<\/p>\n<p><strong>Q4.<\/strong>\u00a0How have Indian industries reacted?<\/p>\n<p><strong>Ans.<\/strong>\u00a0Steel producers warned of global volatility, citing rising costs and calls for caution in an unstable market.<\/p>\n<p><strong>Q5.<\/strong>\u00a0What\u2019s the global trade implication?<\/p>\n<p><strong>Ans.<\/strong>\u00a0India\u2019s assertive WTO move boosts its image as a multilateral trade defender amid growing protectionism from the U.S.<\/p>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/www.thehindu.com\/news\/national\/why-is-india-seeking-to-impose-retaliatory-tariffs-on-us-explained\/article69601591.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India to impose tariffs on \\$7.6B worth of U.S. goods in retaliation to U.S. steel, aluminum duties, citing WTO violations and trade imbalance.<\/p>\n","protected":false},"author":8,"featured_media":46982,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[361,60,22,59],"class_list":{"0":"post-46979","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-india-u-s-trade-dispute","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/46979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=46979"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/46979\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/46982"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=46979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=46979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=46979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}