India Has No Legal Basis to Hit Back at Steel, Aluminium & Automobiles Tariffs: US Tells WTO

India has ‘no legal basis’ to impose retaliatory tariffs against American duties on steel, aluminium and automobolies in the name of safeguarding, the United States told the World Trade Organisation (WTO) in an official communication on Thursday 

This comes soon after India, in an official notification to the WTO’s Safeguards Committee stated that the safeguard measures on steel and aluminium would impact imports of $7.6 billion into the US from India on which the duty collection would be $3.82 billion. In the same manner, the measures can also affect imports of automobile products worth $2.89 billion, on which the duty collection would be $723.75 million.

Back in March 2018, the US had introduced certain safeguard measures on steel and aluminium products by imposing 25% and 10% ad valorem tariffs respectively. Now in February 2025, the safeguard measures on imports of steel and aluminium articles were revised. An ad valorem tariff essentially refers to the tax or duty imposed on goods on the basis of their monetary value, rather than their quantity or weight.

Similarly, the US also adopted a measure in the form of a 25% tariff increase ad valorem on imports of passenger vehicles, light trucks as well as some automobile parts originating from India. The measures on automobile parts have been in effect from May 3, 2025 till an undefined time period.

Further, the US claimed that these tariffs were required and fell under a national security statute as an essential security exception. As per an Economic Times report, they stated that there was "no legal basis" for India's proposal to suspend concessions or other obligations with respect to these measures.

These issues are being taken up at the WTO while the two sides are negotiating a bilateral trade agreement (BTA). Indian trade negotiators are currently in Washington to be a part of the fifth round of India-US BTA talks. Earlier this month also the Indian team was in Washington for talks, with negotiations taking place from June 26 to July 2.

US President Donald Trump announced a raft of tariffs on a number of countries, including India, on April 2. However, it was soon postponed for 90 days until July 9 and later to August 1.

From July 7, the Trump administration has issued tariff letters to a number of its trading partners, including Bangladesh, Indonesia, Japan, South Korea, Malaysia, Thailand, South Africa, Bosnia and Herzegovina, Cambodia, Kazakhstan, Laos, Serbia, and Tunisia.

The US wants duty concessions on certain industrial goods, automobiles, especially electric vehicles, wines, petrochemical products, and agri goods, like dairy items, apples, tree nuts, and genetically modified crops. On the other hand, India is seeking duty concessions for labour-intensive sectors, such as textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas in the proposed trade pact.

The two countries are expected to conclude talks for the first tranche of the proposed bilateral trade agreement (BTA) by September-October this year.

India's merchandise exports to the US rose 21.78 per cent to USD 17.25 billion in April-May this fiscal year, while imports rose 25.8 per cent to USD 8.87 billion.