Last week, India sought consultations with the US after Washington adopted a measure in the form of a tariff increase of 25% ad valorem on imports of passenger vehicles and light trucks, and certain automobile parts originating in or from India.
The measure on automobile parts applied from May 3, 2025, and for an unlimited duration.
On Monday, Washington informed the WTO that the tariffs on autos were imposed pursuant to Section 232, which is a national security statute, and the US is “maintaining these actions pursuant to the essential security exception” in the global trade rules.
Insisting that it did not act pursuant to Section 201 of the Trade Act of 1974, under which it imposes safeguard measures, the US said, “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.”
India had said that the US failed to notify the WTO Committee on safeguards under a provision of the Agreement on Safeguards (AoS) on taking a decision to apply the safeguard measure.The US imported $89 billion worth of auto parts globally last year, with Mexico accounting for $36 billion, China for $10.1 billion, and India for just $2.2 billion.Washington has given a similar response to New Delhi’s proposal to impose retaliatory duties on 29 American products including apples, almonds, pears, anti-freezing preparations, boric acid and certain products made of iron and steel to counter the American tariffs on steel and aluminium in the name of safeguard measures. New Delhi told the WTO that these measures would affect $7.6 billion imports into the US.
The issues at the WTO are coming up at a time when the two sides are negotiating a Bilateral Trade Agreement (BTA). American trade officials were in New Delhi from June 4-10 for the trade pact talks.
