The United States has declined to engage with India at the World Trade Organisation (WTO) over its May 9 notice proposing retaliatory action on steel and aluminium tariffs. Washington maintains that its duties are not safeguard measures and, therefore, fall outside the WTO’s Safeguards Agreement.
The notice followed the US decision on 10 February to impose 25% levies on steel and aluminium imports effective 12 March. Tensions intensified after the US doubled these tariffs to 50% on 30 May, citing national security, with implementation from 4 June.
According to Hindustan Times, India may respond by proportionately suspending trade concessions to American goods such as almonds and walnuts and increasing customs duties on US-origin metals. India’s WTO notification indicated its intent to suspend “concessions and other obligations” effective 30 days after the notice, i.e., from 8 June.
The US, in its 22 May response to the WTO, said India’s retaliation was unjustified. “Accordingly, there is no basis for India’s proposal to suspend concessions or other obligations under Article 8.2 of the Agreement on Safeguards with respect to these measures,” it said, insisting the tariffs were not safeguards.
The US refused to hold consultations under WTO rules, stating, “The United States will not discuss the Section 232 tariffs under the Agreement on Safeguards as we do not view the tariffs as a safeguard measure.” Hindustan Times reported that unless the US grants preferential treatment to Indian exports under the proposed Bilateral Trade Agreement (BTA), India is likely to go ahead with the retaliatory tariffs. A US negotiating team is expected to visit India shortly to continue early harvest deal talks.
According to the GTRI report, “For India, the consequences are direct. In FY25, India exported $4.56 billion worth of iron, steel, and aluminium products to the US, with key categories including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related articles.”
India has already issued a formal notice at the WTO, signalling its intention to impose retaliatory tariffs on US goods in response to the earlier steel tariffs. With (President Donald) Trump now doubling the tariffs, it remains to be seen whether India will carry out the retaliation.”
India earlier proposed retaliatory duties worth $1.91 billion on US products, following the potential impact of safeguard tariffs on $7.6 billion worth of Indian exports. India’s notice stated this would equal the amount of duty collected by the US on affected Indian goods.
The US insists these measures are based on national security. The report noted that a similar dispute occurred in 2018, which led to India imposing tariffs on 28 US items in 2019. That standoff was resolved in June 2023 through the WTO’s Mutually Agreed Solution (MAS) process.
Read More: Best Cement Stocks in June 2025 Based on 5-Year CAGR.
The deadlock over metal tariffs at the WTO highlights rising trade friction between India and the US. With both sides defending their positions and an early harvest deal under negotiation, the outcome of this standoff may shape the future trajectory of bilateral trade relations.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jun 3, 2025, 2:58 PM IST
Team Angel One
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
