Washington Rejects India’s Auto Tariff Claim at WTO, Cites National Security

The US has formally dismissed India’s claim at the World Trade Organisation (WTO) that its auto and auto parts tariffs fall under safeguard measures. The US maintains that the duties were imposed under national security grounds and therefore lie outside WTO safeguard provisions. India, however, has signalled potential retaliatory action.

US Auto Tariffs Face WTO Challenge from India

India has challenged the 25% US tariffs on automobiles and auto parts at the WTO, arguing they qualify as safeguard measures that harm its domestic industry. Under WTO rules, such measures permit affected countries to impose equivalent retaliatory duties. India had earlier reserved its right to do so, citing injury to its auto manufacturing sector.

Washington Cites National Security, Not Safeguards

In a WTO communication dated July 17, 2025, the US clarified that the duties were enacted under Section 232 of the Trade Expansion Act to protect national security. It stressed these are not safeguard measures and therefore do not justify India’s retaliatory tariff proposal under WTO rules. The US rejected any basis for India to suspend trade concessions.

Steel and Aluminium Also in Dispute

This is not the first instance of disagreement. India has previously raised similar concerns over US steel and aluminium tariffs, which were recently doubled to 50%. India had responded to earlier versions of these duties in 2019 with higher tariffs on 28 US products, such as apples and almonds.

Read More: Indian Farmers Face ₹1.03 Lakh Crore Loss if US Dairy Enters Market: SBI!

India’s Planned Retaliation and Trade Negotiation Impact

While India has not released a list of products for new retaliatory duties, officials suggest it may replicate its 2019 strategy. An Indian official confirmed that this action is procedural under WTO rules and does not impact the ongoing India–US trade agreement talks, now in their 5th round in Washington.

Conclusion

The WTO dispute over US auto tariffs has heightened tensions between India and the US. While both sides remain engaged in trade talks, retaliatory duties by India could strain key bilateral trade flows if the disagreement escalates further.

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