Duty imposed on auto on national security grounds; not safeguard measures: US on India's claim in WTO

New Delhi | The US has rejected India's claim that American tariffs on auto and auto parts qualify as safeguard measures under the WTO (World Trade Organization) rules, and asserted that the duties are imposed on national security grounds.

It has added that, on these grounds, India has no basis to propose retaliatory tariffs against these duties.

India has said it is reserving the right to impose retaliatory duties on US tariffs (25 per cent) on automobiles and auto parts, stating that the levies are safeguard measures that are harming its domestic industry.

In a reply to this, the US has informed the WTO that US President Donald Trump imposed these tariffs to adjust imports of these articles as they threaten to impair the national security of America.

"These actions are... not safeguard measures. Accordingly, there is no basis for India's proposal to suspend concessions or other obligations under... the Agreement on Safeguards with respect to these measures," a WTO communication, dated July 17, said.

It was circulated at the request of the delegation of the United States.

The US also said that India has not complied with the obligations under the WTO's Agreement on Safeguards.

"The United States will not discuss the Section 232 tariffs under the Agreement as we do not view the tariffs as a safeguard measure," it added.

A similar communication was also circulated to reject India's claim that American tariffs on steel and aluminium are safeguard measures under the WTO rules.

The proposed suspension of concessions, which India has notified, could take the form of increased tariffs on selected US products. While India has not disclosed those items yet, in a similar move in 2019, it had imposed retaliatory tariffs on 28 US products, ranging from almonds and apples to chemicals.

Earlier this month, India proposed imposing retaliatory duties against the US over American tariffs on imports of the country's auto parts in the name of safeguard measures.

The proposed suspension of concessions or other obligations would take the form of an increase in tariffs on selected products originating in the US.

On July 10, India revised its proposal to impose retaliatory duties against the US over American tariffs on steel and aluminium in view of the further hike in duty by the Trump administration.

The US first imposed 25 per cent tariffs on imports of aluminium, steel and derivative articles on March 12. Again, on June 3, the taxes were hiked to 50 per cent.

An official has said that India's decision to reserve its rights is a procedural move under the WTO rules and it would not affect ongoing negotiations on the proposed trade pact between the two countries.

The Indian team is at present in Washington for the fifth round of negotiations on the proposed bilateral trade agreement.