The threat by the US to impose additional tariffs on imports from India over forced labour supply-chain concerns is a “pressure” tactic deployed by Washington to drive a harder bargain in its trade talks with New Delhi, according to analysts.
Following a Section 301 unfair trade practices investigation, the Trump administration proposed that products from India, China, Japan, South Korea, Brazil and Switzerland would be subject to a 12.5 per cent levy, while a 10 per cent rate would apply to goods from Canada, Mexico, the EU, the UK and Pakistan, among other places.
The recommendation came even as officials from the US Trade Representative (USTR), led by chief negotiator Brendan Lynch, visited Delhi earlier this week to speed up talks on finalising an agreement after reaching an interim framework in February.
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“The engagements were marked by a spirit of cooperation and pragmatism, with both sides reaffirming their commitment to concluding a mutually beneficial agreement that strengthens bilateral trade and economic ties,” the Indian government said in a statement on Thursday.
Washington had earlier agreed to reduce US tariffs on India to 18 per cent from a peak of 50 per cent last year.
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The latest tariff proposal appears to be aimed at replacing some of the tariffs that were rejected by the US Supreme Court in February, analysts say.