Donald Trump’s fresh set of tariffs on steel and aluminium products should be dealt with as a part of the India-US trade deal framework, says the Global Trade Research Initiative (GTRI). This strategy holds particular significance as India and the United States are presently engaged in comprehensive Free Trade Agreement (FTA) discussions.
Last week US President Donald Trump announced a 50% tariff on steel and aluminium imports to the US, effective from June 4, 2025.
GTRI recommends that India should pursue a practical approach by leveraging the current bilateral FTA discussions as a negotiation instrument with the United States.
The GTRI analysis indicates that through the FTA framework, India could achieve a favourable resolution by urging the United States to remove or substantially lower the Section 232 tariffs on steel and aluminium products.
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"This approach would allow India to use its negotiating leverage to gain meaningful market access benefits without escalating the dispute through trade or legal fights at this stage," the release by GTRI said according to an ANI report.
Meanwhile, the US dismissed India's WTO petition on May 23, stating that their steel and aluminium tariffs do not constitute safeguard measures under WTO regulations.
The American stance maintains that these tariffs are implemented under Section 232 for national security considerations, falling within Article XXI of GATT, rather than the Safeguards Agreement. This position invalidates India's proposed suspension of concessions under the Safeguards Agreement.
After the US rejected India's suggested retaliation on both legal and procedural bases, India can still explore alternative courses of action.
GTRI noted that one option involves implementing retaliatory tariffs against the US, which would "send a clear message, but it also brings the risk of U.S. countermeasures and possible legal battles". "Other countries like the EU, Canada, and China have done this against the U.S. Section 232 tariffs as a political signal of resistance."
Another possibility involves initiating a WTO dispute to challenge the US's use of the national security exception, though this approach presents challenges due to America's historical dismissal of WTO judgements on similar grounds and the currently non-operational Appellate Body.
Also Read | Will the Donald Trump administration be forced to give billions of dollars in tariff refunds?
Last week US President Donald Trump announced a 50% tariff on steel and aluminium imports to the US, effective from June 4, 2025.
GTRI recommends that India should pursue a practical approach by leveraging the current bilateral FTA discussions as a negotiation instrument with the United States.
The GTRI analysis indicates that through the FTA framework, India could achieve a favourable resolution by urging the United States to remove or substantially lower the Section 232 tariffs on steel and aluminium products.
Also Read | ‘Wait and watch…’: India, US working to give preferential market access to businesses, says Piyush Goyal on trade deal
"This approach would allow India to use its negotiating leverage to gain meaningful market access benefits without escalating the dispute through trade or legal fights at this stage," the release by GTRI said according to an ANI report.
Meanwhile, the US dismissed India's WTO petition on May 23, stating that their steel and aluminium tariffs do not constitute safeguard measures under WTO regulations.
The American stance maintains that these tariffs are implemented under Section 232 for national security considerations, falling within Article XXI of GATT, rather than the Safeguards Agreement. This position invalidates India's proposed suspension of concessions under the Safeguards Agreement.
After the US rejected India's suggested retaliation on both legal and procedural bases, India can still explore alternative courses of action.
GTRI noted that one option involves implementing retaliatory tariffs against the US, which would "send a clear message, but it also brings the risk of U.S. countermeasures and possible legal battles". "Other countries like the EU, Canada, and China have done this against the U.S. Section 232 tariffs as a political signal of resistance."
Another possibility involves initiating a WTO dispute to challenge the US's use of the national security exception, though this approach presents challenges due to America's historical dismissal of WTO judgements on similar grounds and the currently non-operational Appellate Body.
Also Read | Will the Donald Trump administration be forced to give billions of dollars in tariff refunds?
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