India is reportedly contemplating tariff countermeasures on certain US commodities in response to the country’s punitive 50 percent tariffs on steel, aluminium, and their derivatives that were imposed in June.
“Washington is unwilling to address New Delhi’s concerns through talks, which leaves India with little option other than to retaliate. The US is unjustly acting against India’s economic interest, even as the two countries are negotiating a bilateral trade agreement,” sources familiar with the issue said.
India has the right to retaliate against the US for its irrational and unilateral actions, the sources added. A “proportional response” to Washington’s 50 percent tariff on Indian steel, aluminium, and allied goods may be the first step in the reprisal.
If India implements these countermeasures, it would be the country’s first act of retaliation since US President Donald Trump, who announced 50 percent tariffs. The tariffs were imposed as a penalty for purchasing Russian oil. At the World Trade Organisation, however, the steel and aluminium tariffs have developed into a separate trade war.
“India is a great power that has an independent standing in the world. Everything that Trump is doing on tariffs is unconstitutional,” said American economist Jeffrey Sachs. There are no security advantages for India in supporting the US in the Quad against China, he warned.
On Thursday, Trump said that trade talks with India would not be possible until the issue of tariff was revolved. In response to a reporter’s question at the White House, he replied, “No, not until we get it resolved.”
In response to US tariffs, former vice president of India, M Venkaiah Naidu said on Saturday that the country would not back down from any threats. He was reported by PTI as saying, “We will safeguard energy security, and we will stand firm on our strategic and national interest.”
Trump’s tariffs on India have been described as a possibly “enormous mistake” by John Bolton, the former national security advisor for the US. He claimed in an interview with CNN that it was ironic that the secondary tax, which was meant to harm Russia, may really bring India closer to China and Russia and possibly encourage them to engage in joint negotiations against the US.
The imposition of 50 precent tariffs on India by Trump, puts majority of the Asian country’s $86.5 billion in yearly exports to the US at risk. It also makes India, along with Brazil, the most heavily taxed trading partner of the US, much above competitors like China, Vietnam, and Bangladesh.