The US has proposed an additional tariff of 12.5 percent on India. Delhi did not take the US move lightly. In a brief response, the Union Commerce Ministry said that the issue is currently under discussion with the US. The trade agreement between the two countries is being negotiated at various stages and the issue of tariffs is yet to be finalised.
The Trump administration plans to use Section 301 of the US Code to impose tariffs on a total of 60 countries, including India. According to the US Department of CommerceThis step has been taken with the aim of stopping the import of goods produced in exchange for forced labour. The US announcement comes amid a global economic crisis caused by the war in the Middle East.
The Ministry of Commerce, Government of India stated that regular discussions are going on with the US regarding the implementation of the clause.Furthermore, work is underway to finalize a permanent trade agreement between the two countries, according to a recently issued joint statement. The Union Ministry also said that apart from the earlier Section 232 duty, certain other products have been exempted from the new duty. But the whole matter is still under discussion.
According to the US Department of CommerceThe 60 countries that have proposed an additional 12.5 percent tariff include influential countries such as India, China, Japan, South Korea and the United Kingdom. Washington has demanded action against countries that fail to enforce stricter laws against forced labor products. Countries that have imposed a partial ban on such products may be subject to a 10 percent tariff, and those that have taken no action may be subject to a 12.5 percent tariff. However, the US government will discuss and review public opinion and make the final decision.