India’s retaliatory tariff to hit US exports worth $900 mn: Report

indica News Bureau –


American exports worth nearly $900 million will be impacted if India levies proposed retaliatory tariffs against US agricultural products like apples, almonds, chickpeas and lentils, says the latest Congressional report.

In June 2018, India decided to impose higher tariffs on these American imports from August, in retaliation to US President Donald Trump to impose heavy tariffs on imported steel and aluminum items.

“India has proposed retaliatory tariffs on US apples, almonds, walnuts, chickpeas and lentils, but it has delayed implementation pending ongoing negotiations with the Trump administration,” said the CRS report, which is prepared by independent experts and is not an official position of the US Congress.

Last month, India deferred imposing higher duties worth $235 million on 29 American goods to January 31, 2019. The retaliatory tariffs were scheduled to come into effect on December 17 but were postponed for the fourth time.

The extension coincided with the US and China trying to find a solution to the escalating trade dispute.

With the new tariffs, the import duty on walnut would be hiked to 120% from 30% while that on chickpeas, Bengal gram (chana) and masur dal would become 70 percent from 30 percent. The levy on lentils will be hiked to 40% from 30%.

India ranked third as a destination for US apple exports in 2017, purchasing $ 97 million of US apples, or 10 percent of the total exports.

On the trade front, both sides continue to spar. The key issues include the US levying higher tariffs on Indian steel and aluminum, and reviewing Indian exports’ eligibility for preferential duties.

While India has demanded greater market access for its products from agriculture, automobile, auto components and engineering sectors, the US has sought greater market access for its farm and manufacturing products, including medical devices.

India is negotiating a trade package with the US and has been demanding a waiver on tariff hikes similar to the ones the US granted to Argentina, Brazil and South Korea.

Trump, who has accused India of practicing unfair trade, has said he wants to end subsidies to countries such as India and China.

India’s proposed retaliatory tariff is less compared to China on more than 800 American agricultural products which accounted for approximately $20.6 billion in exports to the US in 2017.

Tariffs have been imposed on the US agricultural products by countries to retaliate against actions the Trump administration took in March last year to protect US steel and aluminum producers.

According to the United States Department of Agriculture (USDA) export data, US exports of those products to the retaliating countries totaled $26.9 billion in 2017.

India has claimed that steel and aluminum exports worth $1.2 billion to the US have been hit post the tariff hike, with the US collecting additional tariffs of $241 million.

India had dragged US to the World Trade Organization (WTO) after Washington rejected New Delhi’s request for an immediate waiver.

The US Trade Representative is reviewing the generalized system of preferences (GSP) eligibility of India, after the US dairy and medical device industries requested a review of the benefits, alleging Indian trade barriers in these sectors.

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