The US has imposed a tariff on steel and aluminium imports into the country
It all started with a decision by US President Donald Trump to impose a tariff on steel and aluminium imports into the US. While the move was largely aimed at China, the world’s largest producer of steel and aluminium, India, with a $24 billion export surplus with the US, isn’t being let off the hook either.
The US has taken India to the World Trade Organization (WTO), the apex body for global trade, challenging various Indian export subsidy programmes. The ones the US has specifically raised include the Merchandise Exports from India Scheme, Export Oriented Units Scheme and sector-specific schemes, including Electronics Hardware Technology Parks Scheme, Special Economic Zones, Export Promotion Capital Goods Scheme, and a duty free imports for exporters programme.
The US believes such export subsidies by India provide financial benefits of over $7 billion to Indian exporters, allowing them to sell their goods cheaper in the US, thereby affecting American workers and manufacturers. The argument is also based on the fact that India was now richer than the WTO’s ceiling ($1,000 per capita income) for countries to offer such programmes. Trump had recently publicly slammed the high import duty on Harley Davidson bikes in India.
“These export subsidy programmes harm American workers by creating an uneven playing field on which they must compete,” Robert Lighthizer, the US trade representative, said in a statement. “USTR [United States Trade Representative] will continue to hold our trading partners accountable by vigorously enforcing US rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO.”