New Delhi: India has joined the European Union and China in hitting back at the United States with the announcement of additional tariffs on 29 American products including apples, almonds, walnuts, pulses and shrimp as a retaliatory move against President Donald Trump’s decision to unilaterally hike import duties on steel and aluminium.
New import duties will hit US exports worth $235 million when they come into effect on August 4, government sources said.
The move comes after the Modi government failed to secure an exemption from US duty hikes for steel and aluminium products.
But, in a change from its earlier decision, India has exempted Harley Davidson motorcycles from punitive duty. Earlier, it had indicated its plan to impose 50% additional duty on the iconic US bikes as a retaliatory measure.
Trump has publicly raised concerns over what he believes is the high import duty that these motorcycles attract in India.
Sources said India’s decision not to raise duties with immediate effect and exempt Harley Davidson bikes are goodwill gestures aimed at keeping alive the possibility of negotiating trade disputes when assistant US Trade Representative Mark Linscott visits India next week.
Last week, India had submitted a list of 30 items to the World Trade Organisation on which it proposed to raise import duty by up to 50% as retaliation against the unilateral US move to hike duty on steel and aluminium products.
As per the finance ministry notification, the import duty on chickpeas, Bengal gram (chana) and masur dal has been increased to 70% from 30% earlier. Lentils will attract 40% instead of 30%.
Shelled almonds imported from the US will now attract import duty at Rs 120/kg as against Rs 100/kg earlier. Almonds in shell will attract import duty at the rate of Rs 42/kg as against Rs 35/kg.
Import duty on ‘walnut-in-shell’ will attract customs duty at the rate of 120% as against 30% earlier. Apples have been subjected to import duty of 75% as against 50% earlier.
The duty on boric acid has been hiked to 17.50%, while it has been doubled to 20% on phosphoric acid.
Import duty on diagnostic reagents has been doubled to 20%. Duty on flat-rolled steel products has been hiked to 27.50% from 15% earlier, while certain flat-rolled products of stainless steel will now attract 22.50% duty instead of 15% earlier.
Meanwhile, the exemption provided by the US to steel and aluminium imports from allies like the EU, Mexico and Canada expired on June 1. Following that, the EU has slapped 25% retaliatory tariff on US goods worth 2.8 billion euros including Harley Davidson bikes. European Commission president Jean-Claude Juncker said duties imposed by the US on the EU go against “all logic and history”.
Mexico too imposed additional tariff on US products worth $3 billion as retaliation. Canada has also vowed to retaliate against the unilateral US move.
In April, China implemented retaliatory tariffs of up to 25% on $3 billion in food imports from the US against the latter’s decision to hike duties on steel and aluminium products.
Trump had announced plans for tariffs on foreign steel and aluminium in March, justifying them on national security grounds. He argued that global oversupply of steel and aluminium, driven by China, threatened American steel and aluminium producers, vital to the US.
After the announcement, South Korea, Argentina, Australia and Brazil had agreed to put limits on the volume of metals they could ship to the US in lieu of tariffs.
The US granted temporary exemptions to the EU, Canada and Mexico amid negotiations over limits. The extended deadline of June 1 has expired.
India had asked the US government to exempt it from the 25% steel tariff and 10% aluminium tariff imposed by Trump on grounds of national security. But the latter rejected India’s request. India has also moved the WTO against the US move.
India’s commerce minister, Suresh Prabhu, visited the US recently to sort out bilateral trade issues. However, he failed to achieve a breakthrough.
The US gave those allies a reprieve from the duties, but the exemptions were set to expire Friday. The Trump administration will place quotas or volume limits on other countries such as South Korea, Argentina, Australia and Brazil instead of tariffs, he said.
Addressing media at the conclusion of the recent G7 summit in Canada’s Quebec City, Trump had singled out India, accusing it of charging 100% tariff on some US goods. “We’re like the piggy bank that everybody is robbing,” Trump had said.
Meanwhile, US-China tit-for-tat tariff hikes threaten to escalate into a full-blown trade war, with Beijing saying it would place its own additional tariffs on 659 US imports worth $50 billion after Washington slapped punitive tariffs on Chinese goods.