India has been spared the worst of Washington’s latest tariff action, but analysts say much work still needs to be done to secure a long-awaited US trade deal despite the lower-than-expected levy.
The Trump administration’s fresh round of tariffs, unveiled last week, targeted 60 economies it accuses of failing to curb imports made with forced labour.
As late as last month, India was being threatened with a 12.5 per cent rate, but ultimately earned a place among the 17 economies – including Canada, Britain, Bangladesh and Pakistan – hit with the lower 10 per cent tariff.
The reprieve followed India amending its foreign trade policy on June 14 to ban imports of goods made with forced labour, which US Trade Representative Jamieson Greer cited when placing India in the lower tariff band.
Washington’s new tariffs were imposed under Section 301 of the US Trade Act, a tool used to respond to trade practices the US considers unreasonable, unjustifiable or discriminatory. They replaced temporary global levies imposed following a Supreme Court ruling in February that struck down much of last year’s “Liberation Day” tariff regime.