India Should Hold Its Ground in Trade Negotiations With the EU

Indian industry needs a wide range of European barriers lowered for it to make export headway

- R.V. ANURADHA & PRACHI PRIYA are, respectively, partner, Clarus Law Associates, and a corporate economist based in Mumbai.

The World Trade Organization (WTO) has been of scant effectiveness against US President Donald Trump's sweeping unilateral tariffs. Wielding the shield of 'national security,' the first Trump presidency levied 25% tariffs on imports of steel and 10% on aluminum. India challenged these and later withdrew its case at the WTO on account of a 'mutual settlement,' though the US never withdrew those additional tariffs. WTO panels initiated by other members, including Norway, Switzerland and China, ruled in 2023 that the tariffs did not pass the 'national security' test. The US, however, ignored these rulings. Trump's second presidency has seen the national security shield cast wider, first for sweeping Liberation Day tariffs against over 90 countries, and more recently, for a 50% tariff against steel and aluminum imports. A group of businesses in the US successfully challenged the Liberation Day tariffs, but the administration has appealed the decision. India has so far not retaliated. The UK may reportedly get a conditional exemption from the 50% tariff on steel under a US-UK free trade agreement (FTA), although Tata Steel as a big UK steelmaker may not get that benefit as US import rules require steel to be "melted and poured" in the country of origin, in this case the UK. It is difficult to envisage a more stark repudiation of the rule of law.