India-US trade dispute escalates over auto, metal tariffs at WTO
By Anjali Sharma
WASHINGTON – US on Friday has rejected India’s assertion at the World Trade Organization that American tariffs on automobiles and auto parts qualify as safeguard measures under global trade rules.
US maintained that the duties were imposed on national security grounds and therefore fall outside the purview of the WTO’s safeguard provisions.
US stated that the tariffs were implemented by President Donald Trump under Section 232 of the Trade Expansion Act, aimed at addressed perceived threats to national security from increased imports.
“These actions are not safeguard measures. Accordingly, there is no basis for India’s proposal to suspend concessions or other obligations under the Agreement on Safeguards with respect to these measures,” the US said in the document.
The statement came in response to India’s move to reserve the right to impose retaliatory duties on US imports.
It cited harm to its domestic auto and auto parts industry from the 25% US tariffs. India argued that the measures amount to safeguards and therefore entitle it to compensation or countermeasures as per WTO rules.
US has countered that India has not complied with its obligations under the WTO’s Agreement on Safeguards and emphasized it will not negotiate the Section 232 tariffs under that framework.
A similar communication was issued by the US earlier to reject India’s classification of tariffs on steel and aluminium as safeguard measures.
India revised its proposal to impose retaliatory duties on US imports in light of a further increase in American tariffs on steel and aluminium from 25% to 50%.
India’s proposed suspension of concessions would involve increased tariffs on selected US-origin products, though a final list of items has not been disclosed. In a comparable move in 2019, India had imposed retaliatory duties on 28 US items including almonds, apples, and chemicals.
The officials have clarified that India’s latest move is procedural under WTO dispute settlement protocols and does not impact the ongoing fifth round of negotiations between the two countries on a proposed bilateral trade agreement. The Indian delegation is currently in Washington for the talks.
The dispute adds to ongoing tensions over the interpretation of national security exceptions at the WTO, a contentious issue that has drawn increased attention following similar challenges involving Russia and other WTO members.
