India counters Trump tariffs, to hike duty on US bikes, almonds, apples

India counters Trump tariffs, to hike duty on US bikes, almonds, apples
NEW DELHI: India has proposed to raise import duty on 30 products, ranging from motorcycles and certain iron and steel goods to boric acid and lentils. The customs duty on some of the items may be raised up to 50 per cent, in a signal that New Delhi will hit back at America’s protectionist policies that range from a tighter visa regime to higher import duties.

The proposed increase in import duties is aimed at countering the impact of higher US tariffs on certain steel and aluminium products which would have implications of around $240 million on India.

The move was initiated within hours of commerce and industry minister Suresh Prabhu‘s meeting with US officials to sort out niggling trade issues. On Friday, he had said that officials from the two sides would meet to iron out differences. The minister discussed some of the concerns with US officials in Washington earlier this week. Earlier in May, India proposed to raise duties by up to 100 per cent on 20 products such as almonds, apple and specific motorcycles imported from the United States.

The additional duty proposed to be hiked on these items ranges from 10 per cent to 50 per cent. Those at the lowest include almonds, walnuts and fresh apples – which will cost a little more for consumers as an additional duty of 10 per cent is proposed to be imposed.

But the real impact will be on products such as motorcycles over 800 cc – a move targeted at Harley-Davidson – where an additional duty of 50 per cent has been proposed. This is seen as a real counter to President Donald Trump who had demanded a reduction in tariff on the cult bike brand.

“India hereby reiterates its decision to suspend concessions or other obligations notified to the Council for Trade in Goods on May 18, 2018… of the General Agreement on Tariffs and Trade 1994 and Article 8.2 of the Agreement on Safeguards that are substantially equivalent to the amount of trade affected by the measures imposed by the US,” India said in a four-page communication, according to WTO, on Thursday. It said the proposed suspension of concessions or other obligations takes the form of a rise in tariffs on selected products originating in the US, based on America’s measures.

The government threatened further action. “India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the US,” it added.

On March 9, Trump imposed heavy tariffs on imported steel and aluminium items, a move that has sparked fears of a global trade war.

Earlier, India had stated that these suspension would come into effect earlier than June 21, 2018, in case the US decided to continue the period of application of the measures. On Thursday, the government said that the duty imposed by America has affected steel exports by $198.6 million, while the same on aluminium was $42.4 million.

India’s actions are expected to have the maximum impact on almonds ($116 million), followed by fresh apples ($24 million) and phosphoric acid ($14 million), the communication to WTO said.

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