India eyes retaliation as US rejects WTO notice

The US has rejected India's May 9 notice at the World Trade Organization that proposed retaliatory action against Washington imposing steep import tariffs on steel and aluminium and said its actions were not safeguard measures, which is why it would not hold any discussion with New Delhi on the matter, people in the know said on Sunday.

- Rajeev Jayaswal

Under the current circumstances, India may retaliate by proportionately suspending concessions given to American imports (for example almonds and walnuts) and levy higher customs duties on metals coming from the US, said the people cited above, requesting anonymity. The Indian notice was against the US's February 10 decision to impose 25% levies on all imports of steel and aluminium effective from March 12. Now, the matter has been aggravated further as the Trump administration on May 30 doubled tariffs on the metals to 50% effective from June 4, citing national security.

Against the US measure to hike import duties on steel and aluminium to safeguard American metal industries, India on May 9 formally notified WTO that it could suspend "concessions and other obligations" granted to the US "after the expiration of 30 days from the date of this notification", which would be June 8.

Reacting to India's notice, the United States on May 22 informed WTO that India's proposed retaliation was not consistent with the multilateral trade rules. Washington said the US tariffs on metals were "not safeguard" measures. "Accordingly, there is no basis for India's proposal to suspend concessions or other obligations under Article 8.2 of the Agreement on Safeguards with respect to these measures," it said in its latest communication to WTO.