Tough India-US trade discussions amidst irritants over tariff tensions
Throughout last week, President Trump of the United States repeatedly irritated India with one upsetting statement or the other. India tried to pinprick the US with a proposal to impose retaliatory tariffs. Both governments should now settle down to some serious trade talks during the visit of our Commerce Minister to the US this week.
Trump claimed that he threatened use of trade as a tool to coerce India and Pakistan to cease hostilities. He asked the chief of Apple, the leading phone making company, not to make its phones in India but in the US. He said that India has agreed to zero duties on import of most products from the US. India promptly rejected his claims.
Last Monday, India notified the World Trade Organisation (WTO) of its proposal to impose retaliatory tariffs against the raising of tariffs on imports of steel and aluminium products by the US from 12th March 2025. India's communication followed a similar notice from the United Kingdom on 9th May 2025, proposing retaliation under the WTO agreement on safeguards (AoS).
Japan followed India with a similar notification. It is difficult to understand the purpose of these proposals as all these countries are negotiating trade deals with the US. In fact, the US had already agreed to bring down the duties on steel and aluminum imported from the UK, as part of a mini trade agreement. Strangely, the notifications about the retaliation proposals of India, Japan and UK and replies of the US to Japan and UK, arguing that AoS cannot be invoked because no safeguard duties were imposed, could be seen on the WTO website till Thursday but vanished from there on Friday.
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