Is Trump planning to impose more tariff of India over 'forced labour'? Additional tariffs may range from 10% to...
US Tariff on India: The Office of the US Trade Representative (USTR) has added India to a list of countries accused of engaging in alleged unfair trade practices.
Is Trump planning to impose more tariff of India over 'forced labour'? Additional tariffs may range from 10% to... (Pic:X)
US-India tariff war: Negotiations are ongoing between India and the United States regarding a long-promised trade agreement. Senior officials from both countries are meeting in New Delhi to explore ways to further strengthen trade relations. Meanwhile, a move by the United States is raising several questions. The Office of the US Trade Representative (USTR) has added India to a list of countries against which it has expressed concern regarding alleged unfair trade practices and the import of products involving forced labor. Furthermore, the US has proposed imposing additional tariffs ranging from 10% to 12.5% on goods imported from such countries.
The timing of this proposal makes this entire development even more significant. While both countries are negotiating to finalize a trade deal, this US move has raised new concerns for Indian exporters. This is why this move is being seen as a betrayal by the US of India.
What is the whole matter?
The USTR has released the results of 60 investigations conducted under Section 301. These investigations have classified 54 economies, including India, as countries that, according to the US assessment, are not taking adequate steps to prevent the import of products made with forced labor.
The US argues that such products create unfair competition in the global marketplace and harm American companies and workers. The administration says it will have to take steps to protect its domestic industries if trading partners don't take adequate action on this issue.
However, what is worrying for India is that this entire issue has emerged at a time when trade agreement negotiations between the two countries are entering a crucial phase. The proposal for additional tariffs is seen as a move that could increase pressure on Indian exporters. The US has indicated that countries that have banned products linked to forced labor or taken steps towards doing so may face relatively small additional tariffs, while countries that do not meet these standards could face higher tariffs.
How is it a matter of concern for India?
However, what is worrying for India is that this entire issue has emerged at a time when trade agreement negotiations between the two countries are entering a crucial phase. The proposal for additional tariffs is seen as a move that could increase pressure on Indian exporters. The US has indicated that countries that have banned products linked to forced labor or taken steps towards doing so may face relatively small additional tariffs, while countries that do not meet these standards could face higher tariffs.
On which countries are additional tariffs proposed?
However, India is not alone in this list. The US also included the names of several major trading partners, such as China, Japan, Australia, Britain, South Korea, Singapore, Saudi Arabia, the United Arab Emirates, Qatar, Oman, Bangladesh, Malaysia, and Vietnam.
At the heart of the entire dispute is Section 301. This is a provision of the US Trade Act of 1974, which authorizes the USTR to investigate the trade policies of other countries and recommend retaliatory action if they are found to be contrary to US interests. Under this provision, the US can impose additional tariffs, trade restrictions, or other trade measures.
At present, this is only a proposal, and a final decision has not yet been made. However, if the US goes ahead and imposes additional tariffs, the cost of Indian products in the US market could increase. This could particularly impact exporters whose significant business depends on the US market. This is why this proposal, coming simultaneously with ongoing trade deal negotiations, is creating an uncomfortable situation for India. In the coming days, it will be important to see whether the two countries move forward towards a trade agreement or whether this new tariff dispute creates a new sourness in relations.
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