US Rejects India's WTO Tariff Talks Request, Cites National Security Clause
12 Jun 2025 1:09 PM IST12 Jun 2025 1:09 PM IST
The US had imposed 25 per cent tariffs on all automobiles and automobile parts imported into the country from April 3.
The United States has rejected India’s request for consultations on the tariffs imposed on automobiles and automobile parts under the WTO provisions for safeguard duties.
Chennai: The United States has rejected India’s request for consultations on the tariffs imposed on automobiles and automobile parts under the WTO provisions for safeguard duties. It said that the tariffs are necessary to adjust imports of autos that “threaten to impair the national security”.
The premise for India's request for consultations under Article 12.3 of the Agreement on Safeguards is that the tariffs are safeguard measures. The Agreement on Safeguards states that a "member proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations" with members having a substantial interest in exports of the product concerned, the US said in its reply to India.
However, the United States did not take action pursuant to Section 201 of the Trade Act of 1974, which is the law under which the United States imposes safeguard measures. These actions are not safeguard measures and, therefore, there is no basis to conduct consultations under the Agreement on Safeguards with respect to these measures, it said.
The President imposed the tariffs on autos pursuant to Section 232, under which the President determined that tariffs are necessary to adjust imports of autos 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 claimed.
“Nonetheless, we are open to discuss this or any other issue with India. Any discussions regarding the tariffs would not be under the Agreement on Safeguards and would be without prejudice to our view that the tariffs are not safeguard measures,” it said.
The US had imposed 25 per cent tariffs on all automobiles and automobile parts imported into the country from April 3.
The US accounted for $8.9 million shipment of automobiles from India in 2024, which was 0.13 per cent of India’s total automobile exports. In the case of auto components, India exported $2.2 billion worth products to the US in 2024, comprising 29.1 per cent of its global auto part exports.
The US has relaxed the 25 per cent tariff for the UK under the recently concluded trade agreement. Under the deal, the first 100,000 vehicles exported by the UK each year to the US are subject to the reciprocal rate of 10 per cent and any additional vehicles each year are subject to 25 per cent rates.
India too is hopeful that the US will relax the tariffs as part of the Bilateral trade Agreement, talks for which are currently on between the two countries.
The premise for India's request for consultations under Article 12.3 of the Agreement on Safeguards is that the tariffs are safeguard measures. The Agreement on Safeguards states that a "member proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations" with members having a substantial interest in exports of the product concerned, the US said in its reply to India.
However, the United States did not take action pursuant to Section 201 of the Trade Act of 1974, which is the law under which the United States imposes safeguard measures. These actions are not safeguard measures and, therefore, there is no basis to conduct consultations under the Agreement on Safeguards with respect to these measures, it said.
The President imposed the tariffs on autos pursuant to Section 232, under which the President determined that tariffs are necessary to adjust imports of autos 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 claimed.
“Nonetheless, we are open to discuss this or any other issue with India. Any discussions regarding the tariffs would not be under the Agreement on Safeguards and would be without prejudice to our view that the tariffs are not safeguard measures,” it said.
The US had imposed 25 per cent tariffs on all automobiles and automobile parts imported into the country from April 3.
The US accounted for $8.9 million shipment of automobiles from India in 2024, which was 0.13 per cent of India’s total automobile exports. In the case of auto components, India exported $2.2 billion worth products to the US in 2024, comprising 29.1 per cent of its global auto part exports.
The US has relaxed the 25 per cent tariff for the UK under the recently concluded trade agreement. Under the deal, the first 100,000 vehicles exported by the UK each year to the US are subject to the reciprocal rate of 10 per cent and any additional vehicles each year are subject to 25 per cent rates.
India too is hopeful that the US will relax the tariffs as part of the Bilateral trade Agreement, talks for which are currently on between the two countries.
( Source : Deccan Chronicle )
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