The US is not willing to discuss sectoral tariffs: Sources
CHENNAI: The first tranche of the Bilateral Trade Deal with the US is most unlikely to exempt sectoral tariffs on steel, aluminum, automobiles and auto parts. After providing an exemption to the UK, such a decision by the US would be unfair towards India, finds the industry.
India has been insisting on including sector tariffs in the BTA and had referred to the US-UK deal. Under the trade deal with the UK, the US has relaxed the Section 232 tariffs on steel, aluminium and automobiles. The tariffs on steel and aluminium have been brought down to zero for the UK. 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.
However, the US wants to keep the sectoral tariffs outside the trade deal with India. According to sources, the US is not willing to discuss sectoral tariffs.
The sectoral tariffs on steel and aluminium imports were raised by the US from 25 per cent to 50 per cent on June 4. The tariffs on automobiles and auto parts are at 25 per cent.
Excluding sectoral tariffs from the BTA will be unfair for India, finds the industry. “We have been requesting the government to push for exemption of steel and aluminium tariffs. From June we may start seeing the impact of the sectoral tariffs on steel and aluminium exports,” said Pankaj Chadha, chairman, Engineering Export Promotion Council. India’s exports of steel, aluminium and their derivative products to the US account for around $5 billion.
The first tranche of the trade deal, likely to be signed before the deadline of July 9, will mainly deal with reciprocal tariffs. India could see some relief on the reciprocal tariffs, with basic tariffs and MFN tariffs retained. On the other hand, the US has been insisting on relaxing the tariffs and non-tariff measures on agricultural products and bringing the duties on several other products to zero.
