The United States has placed India in a lower 10 per cent tariff category, after the country was initially considered for a steeper 12.5 per cent rate. The lower rate followed what officials called constructive talks with Washington on labour practices.
The Office of the US Trade Representative (USTR) announced tariffs of 10 to 12.5 per cent on 60 economies on Thursday, directed by President Donald Trump, over what it called inadequate steps to ban the import of goods made with forced labour. India is among 17 economies placed in the lower 10 per cent band, alongside the UK, Canada, Indonesia, Bangladesh and Mexico.
The USTR said the 10 per cent rate applies to economies that either ban forced labour imports, have committed to doing so through a reciprocal trade agreement, or have a partial ban already in place. The countries in this band include Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the UK, according to the USTR statement.
What did the US say about the move
USTR Ambassador Jamieson Greer said decades of moral pressure had failed to remove forced labour from global supply chains, and added, “it’s well past time for our trading partners to do the same” referring to the US’s own long-standing ban.
He also welcomed countries that had acted quickly to adopt similar bans.
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Which countries faced the higher tariff?
Products from the European Union, Taiwan, Japan, South Korea and Switzerland will face a 10 or 12.5 per cent rate on top of existing duties, while all other economies investigated face the full 12.5 per cent rate, according to the USTR statement. The new tariffs take effect from Friday.
The USTR opened investigations into 60 economies in March under Section 301 of the Trade Act of 1974, followed by talks with more than 45 governments and public hearings. The agency said it reviewed over 1,600 written comments before deciding on the new rates.
The move follows a US Supreme Court ruling earlier this year that many tariffs imposed under emergency powers were unlawful, pushing the administration to pursue other legal routes for its trade agenda.
(With inputs from agencies)