India Targets US Tariffs Through WTO
India has promised to impose retaliatory tariffs on the United States. This is done under the provisions of the World Trade Organization (WTO) rules. According to India, US tariffs imposed on motor vehicles are within the framework of WTO guidelines. Thus, India has officially requested the WTO's Council for Trade in Goods to withdraw certain concessions currently provided to the US.
Background on US Tariff Action
On March 26, the US raised import tariffs by 25%. Import tariffs are on passenger cars, light trucks, and automobile parts from India. The US imposed them on May 2. But the US failed to inform the WTO of these changes. India perceives this as a violation, particularly because the US failed to state a timeframe for the tariffs.
Violation of GATT Rules
India asserts the US move violates rules under GATT 1994 and the WTO Safeguards Agreement. As a counter move, the WTO issued a notification. It says India can withdraw benefits and incentives for the US. India now intends to impose level tariffs on US products to enter India. Furthermore, India reminded the WTO that it retains the right to act against previous US tariffs on aluminum and steel.
US Tariffs on Indian Exports
Indian exports totaling $2.895 billion are subjected to additional US tariffs each year. The additional cost from the tariff can amount to $723.75 million every year.
India-US Trade Statistics
Last year, America had exported merchandise valued at $89 billion to India. Of this, auto parts constituted a mere fraction—just $2.2 billion. Compare this with Mexico, which had exported $36 billion and China $10.1 billion worth of auto parts to America.
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