India-US Metal Tariffs Dispute-New Delhi: A simmering trade dispute between India and the United States threatens to boil over after Washington dismissed India’s formal complaint at the World Trade Organization (WTO). The conflict centers on steep U.S. tariffs on Indian steel and aluminum imports – now doubled to 50% – which India claims unfairly target its exports.
Why India is Threatening Retaliation (India-US Metal Tariffs Dispute)
On May 9th, India notified the WTO of plans to impose retaliatory tariffs on U.S. goods like almonds, walnuts, and apples. This move came in response to the U.S. imposing 25% duties on steel and 10% on aluminum imports starting March 12th, citing “national security.” India argued these were illegal “safeguard measures” designed to protect American industries.
The U.S. response was blunt: On May 22nd, Washington rejected India’s notice outright. The U.S. Trade Representative declared the metal tariffs were not safeguard measures and refused to discuss them under WTO safeguard rules. This leaves India with a stark choice: back down or retaliate unilaterally by June 8th.
Economic Stakes Are High
Indian exporters face severe pressure:
- $4.56 billion of annual iron, steel, and aluminum exports to the U.S. are now hit by 50% tariffs.
- Key affected sectors include finished steel products ($3.1 billion) and aluminum goods ($860 million).
- Retaliatory tariffs from India could target $1.91 billion worth of U.S. imports.
“Profitability for Indian metal producers is under direct threat,” warns Ajay Srivastava, trade expert and founder of GTRI. “With tariffs doubled, New Delhi must decide swiftly on countermeasures.”
A Rocky History Repeats?
This clash echoes a 2018-2019 dispute:
- 2018: Trump imposed metal tariffs (25% steel, 10% aluminum).
- 2019: India retaliated with duties on 28 U.S. products (including almonds) and filed a WTO case.
- 2023: Both sides reached a truce – the U.S. granted some tariff exemptions, India lifted retaliatory duties.
Now, the cycle restarts. Despite ongoing talks for a limited trade deal (“early harvest”), the U.S. refusal to engage at the WTO pushes India toward retaliation.
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What Happens Next? (India-US Metal Tariffs Dispute)
India’s path is fraught:
- Option 1: Suspend U.S. trade concessions by June 8th, imposing higher tariffs on select imports.
- Option 2: Seek urgent resolution during this week’s U.S. trade delegation visit to Delhi.
- Option 3: File a new WTO dispute – though this is slow and the WTO’s appeals body remains paralyzed.
“Without a functional WTO court, these disputes become tests of diplomatic resolve,” notes a source close to the talks.
Key Takeaways India-US Metal Tariffs Dispute :
| India’s Position | U.S. Position |
|---|---|
| Seeks WTO-approved retaliation | Calls tariffs a “national security” issue |
| Faces $4.56B export risk | Rejects “safeguard” label |
| Deadline: June 8 for action | Refused negotiations at WTO |
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