US rejects India’s steel tariff plea

Washington

The United States has rejected India’s challenge at the World Trade Organization (WTO) against the 25% tariffs imposed on steel and aluminium imports, citing legal and procedural grounds. The US argued the tariffs were implemented under Section 232 of its domestic law, which permits such actions on national security grounds, not as safeguard measures, as India claimed.

In its May 23 submission, the US said India misunderstood the nature of the tariffs and had failed to follow proper procedural steps. It pointed out that India did not respond to the US offer for consultations made on April 16, which it says violates the WTO’s Safeguards Agreement. The issue gained significance after former US President Donald Trump recently announced plans to double these tariffs to 50%. Indian exporters have termed the move “unfortunate,” stating that the initial tariffs had already caused $5 billion in export losses and the increase could worsen the situation. In FY2025, India exported $4.56 billion worth of iron, steel, and aluminium goods to the US, all now at risk.

Ajay Srivastava of the Global Trade Research Initiative (GTRI) said India has multiple options, including launching a WTO dispute under broader GATT rules or unilaterally imposing retaliatory tariffs like the EU, Canada, and China did. However, both routes carry political and legal risks. GTRI suggests India could take a pragmatic approach by using its ongoing Free Trade Agreement (FTA) talks with the US as a platform to resolve the dispute diplomatically rather than escalating the matter immediately through trade retaliation or legal action.