International Relations Prelims cum Mains

India hits back at the U.S. with tariffs

The news:

  • Responding to the US import tariffs on certain steel and aluminium products, India has decided to suspend concessions on 30 products being imported from the US.


  • Earlier this year, US President Donald Trump announced a 25 per cent and 10 per cent tariff on imported steel and aluminium respectively from all countries, except Canada and Mexico, citing national security as one of the key reasons behind the move.
    • US is the world’s largest steel-consuming nation.
  • The Indian government repeatedly requested an exemption from these tariffs as India did not pose a security threat to the U.S., but to no avail.
  • India has also taken the U.S. to the dispute settlement mechanism in the WTO (World trade organization) over the matter.
  • Now India has decided to begin retaliatory measures against the U.S.
  • India, in a letter to the WTO, stated that the suspended concessions are substantially equivalent to the amount of trade affected by the measures imposed by the US.

The impact:

  • US’ decision to hike import duties will have an impact of about $241 million-$200 million on steel and $42million on aluminium. India exports only about 4 per cent of its steel and 2 per cent of aluminium to the US.
  • With the removal of concessions on the imports from the US on items such as chickpeas, lentils, almonds, apples and some metal products, India expects around $238 million of duty to be collected.
  • Trump’s announcement, in line with his America First policy, sparked fears of a trade war after countries began mulling imposing their own tariffs.

What is America First policy?

  • America First refers to a foreign policy of the United States under the administration of President Donald Trump that emphasizes American nationalism and anti-interventionism. Some of the steps taken by U.S. in this regard are:
    • Stricter H1 B visa migration rule
    • Reduce corporate Tax on US firms
    • Renegotiate all trades pacts
    • Counter China’s dominance
    • America to become self sufficient in energy through shale oil boost, natural gas and coal etc
    • Hard stance on Terrorism
    • Soft Stance With Russia
    • Going soft on countering climate change
    • Hard stand to counter Radical Islamism


What is the role of WTO in world trade?

  • The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.
  • At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified by their parliaments.
  • The ultimate goal of the WTO is the provision of freer global trade and economic relationship among members.

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