The India-US Tariff Dispute Is More a Battle of Principles

India-US trade relations have witnessed a serious shake-up over the last few weeks, with India maintaining a principled position of sovereignty.

- Amitayu Sengupta

This comes in the context of the turmoil initiated by the heavy-handedness of the Donald Trump-led US administration that risks undermining the global trade order established over the last three decades in the form of the World Trade Organization (WTO).

The advantage of a multilateral platform like WTO is that it provides a framework that all countries can leverage to protect their interests. The recent strategy by the US government to undermine the global framework while striking multiple bilateral trade treaties is a concerted effort to squeeze their trading partners to the maximum possible extent.

In particular, the US President has been trying to pressure India by repeatedly singling it out as "one of the highest taxed or tariffed countries in the world", even as both countries work on a bilateral trade deal. For instance, Trump recently suggested that India has "offered" to cut 100% tariff on all US imports, and that he asked Apple Inc. to not shift its manufacturing base to India. This adds to the recent geopolitical tension India had with its neighbour where the US President claimed to have negotiated a de-escalation by leveraging the trade deal.

While India has diplomatically refuted much of these tall claims, it has also initiated a firm pushback by leveraging the WTO platform.