US Tariffs On Brazil Should Be A Lesson To India: GTRI

Chennai: The US proposing 25 per cent tariff following Section 301 investigations in a broad range of topics unrelated to trade with the US, shows that it can use the tariff threat against any policy of India it finds detrimental to its interests. Experts opine that India should not make sweeping concessions fearing Section 301 tariffs.

The United States has proposed a 25% additional tariff on a broad range of imports from Brazil from July 22, marking the first country-specific action under its revamped Section 301 strategy.

The broad investigation covered digital trade and Brazil's Pix instant payment system, preferential tariffs granted to India and Mexico, weak anti-corruption enforcement, inadequate intellectual property protection, restrictions on U.S. ethanol exports, and illegal deforestation that allegedly gives Brazilian producers an unfair cost advantage.

Separately, Brazil is also under a U.S. Section 301 investigation on forced labour.

However, the tariffs will not apply to coffee, beef, orange juice and certain aircraft parts, reflecting Washington's effort to avoid disrupting U.S. domestic supply chains.

India is currently under Section 301 investigations only for forced labour and structural excess capacity, although the annual U.S. National Trade Estimate (NTE) Report continues to criticize India on a wide range of issues, including tariffs, digital trade, data localisation, intellectual property, agriculture, standards, government procurement and regulatory policies, finds GTRI.

“The Brazil case shows that U.S. trade concerns extend far beyond tariffs and can cover almost any policy Washington considers discriminatory or commercially disadvantageous,” it said.

India should therefore respond calmly to future U.S. actions as they arise, rather than making sweeping concessions through trade deals or outside of it through budget or policy changes to avoid possible investigations or penalties, it added.