June 2,2025
New Delhi, India
India May Retaliate as US Rejects WTO Appeal Over Metal Tariffs
India is preparing to retaliate after the United States rejected its WTO notice opposing steep US import duties on steel and aluminium. The US has refused to recognize India’s claim under the Agreement on Safeguards, asserting that the tariffs—raised from 25% to 50%—were imposed under Section 232 of the Trade Expansion Act of 1962 for national security reasons and thus fall outside WTO jurisdiction.
India’s May 9 notification had warned of a suspension of trade concessions on US goods from June 8, in response to the US’s earlier tariff hike, which affected Indian metal exports worth $4.56 billion in FY25. These include $3.1 billion in iron and steel articles and $860 million in aluminium-related products.
With the US outright rejecting discussions at the WTO, Indian officials say retaliation is likely. Targeted US goods may include almonds, walnuts, and select metal products. These measures would mirror a 2019 episode when India imposed duties on 28 American items in response to similar tariffs, a conflict that was later settled amicably in 2023 through a Mutually Agreed Solution (MAS).
According to India’s WTO submission, the US’s safeguard duties could result in $1.91 billion in duty collections on Indian goods, prompting New Delhi to propose proportional retaliation on American exports.
Trade experts caution that without a functioning WTO appellate body, India’s options are limited. Yet, with both sides negotiating a potential Bilateral Trade Agreement (BTA), New Delhi may still weigh diplomacy over escalation. A visiting US delegation this week could prove crucial to the outcome.
As economic stakes rise and WTO mechanisms remain ineffective, India must now choose between imposing retaliatory tariffs or seeking preferential trade terms through continued negotiations.
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