US Declines To Discuss With India On Auto Tariffs As Safeguard Duties

Chennai: The United States has declined to discuss with India the sectoral tariffs imposed on the exports of automobiles and auto parts under the Agreement of Safeguards as it maintains that these are not safeguard duties.

US President Donald Trump had imposed the tariffs on autos pursuant to Section 232, under which the President determined that tariffs are necessary to adjust imports of these articles that threaten to impair the national security of the United States. Section 232 is a national security statute, and the United States is maintaining these actions pursuant to the essential security exception in Article XXI of the GATT 1994, the US said in a notification issued by the WTO.

The US was replying to India’s notification issued on July 3 informing the World Trade Organisation that it proposes to impose retaliatory tariffs on the US against levying safeguard duties on imports of automobiles and auto parts.

India had proposed to suspend concessions provided to US imports equivalent to the adverse effects on India’s trade due to the 25 per cent tariffs imposed on automobiles and auto parts. The proposed suspension of concessions or other obligations would take the form of an increase in tariffs on selected products originating in the United States.

However, the US maintained that “it is not "applying [a] safeguard measure." Thus, by its terms, Article 8.2 cannot accommodate India's proposal”.

It also said that India has not complied with the obligations under the Agreement on Safeguards, the agreement that it mistakenly contends applies to the tariffs at issue. The United States will not discuss the Section 232 tariffs under the Agreement on Safeguards as we do not view the tariffs as a safeguard measure.