White House to decide on rollback of tariff on Indian steel, aluminium

Amiti Sen New Delhi | Updated on April 13, 2018

US President Donald Trump   -  AP

US Trade Representative office forwards New Delhi’s arguments to Trump’s office

The White House will take a final call on India’s request for a rollback of higher import tariffs on steel and aluminium imposed by the US.

“The US Trade Representative’s office has forwarded to the White House all arguments made by India on why it should not be saddled with higher import duties. It is the US President’s office which would now have to decide the matter,” a government official, privy to the recent India-US Trade Policy Forum dialogue, told BusinessLine.

The US imposed a 25 per cent levy on steel and 10 per cent on aluminium on a handful of countries, including India and China, in March, ostensibly to protect US national security and economic interests.

India wants the US to revoke the levy as was done in the case of the EU, Argentina, Australia, Brazil, South Korea, Canada and Mexico.

“Our main argument against the duty increase is that India has actually taken steps over the past year to reduce the trade deficit with the US and the same can’t be said about countries like China,” the official said.

In 2017, the US’ trade deficit with India came down to $22.8 billion from $24.3 billion. “In a single year, 2017, the US exports to India jumped to $25.7 billion, from $21.7 billion in 2016,” the official said.

The US trade deficit with China, on the other hand, increased to about $375 billion in 2017 from $345 billion in 2016.

“We pointed to the concrete efforts made by the country in increasing imports from the US at the India-US Trade Policy Forum meeting this week and insisted that these should be recognised and the increased duty on steel and aluminium be rolled back,” the official said.

Strategic partner

New Delhi also pointed out that the country has been a strategic partner of the US in defence for a long time and posed absolutely no security threat.

“The USTR office representatives assured us that all our arguments were being forwarded to the White House which will go through it and take a final decision on the matter,” the official said. The government is working on the actual hit that the steel and aluminium industry could take because of the increased tariffs by the US.

“The hit that our industry will take will not just be restricted to the fall in exports to the US. The fallout would also be incidental as it could get crowded out of its other global markets which would see more intense competition from China and Japan which stand to lose their market in the US,” the official explained.

While China has hit out at the US’ unilateral measures by announcing reciprocal tariffs on a number of items exported by the US to the country, no other country has yet adopted the tit-for-tat measure.

New Delhi could complain to the World Trade Organisation (WTO) against the higher import tariffs (if these are not withdrawn) as the duties have been imposed selectively and go against multilateral trade rules.

Published on April 13, 2018

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