Kolkata: The US has announced a fresh tariff slab of 10% against India on the issue of use of “forced labour” to produce goods that are exported to the US.
This has been announced as a part of the Section 301 investigations that was launched against dozens of trading partners of the US. Effectively this tariff doesn’t really change much as it will replace a 10% tariff which was imposed temporarily by the Trump administration and it expires today. According to reports, India has been placed in the lower 10% tariff category. While Washington slotted New Delhi for 12.5% tariff, the slab was lowered after discussions which assured changes in labour practices. The White House has said that economies such as China, the UK and Japan will face tariffs of 12.5%. However, unfortunately this is not the end of the fresh tariffs that Trump is going to announce and the US media has said that more tariffs are coming.
What the USTR said
“The United States has had a forced labour import ban for nearly a century, and rigorously enforces it. It’s well past time for our trading partners to do the same,” US Trade Representative Jamieson Greer has said. “Today’s action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere,” his statement added.
Tariffs on India
India managed to secure a lower tariff in comparison to China, Japan and the UK by addressing forced-labour enforcement concerns. The US administration has said that some countries such as Cambodia, Guatemala, Honduras, India, Sri Lanka, and Trinidad and Tobago have imposed forced labour import prohibitions or undertaken commitments regarding forced labour import prohibitions in an Agreement on Reciprocal Trade. “As a result of these actions, the Trade Representative has advised me that the goods of these economies should be tariffed at the 10 per cent rate to further encourage these economies to effectively enforce such prohibitions, and, in the case of Jordan, to enact and effectively enforce its commitments regarding forced labour import prohibitions,” said the statement.
More tariffs coming
The Washington Post has reported that within weeks the US government could announce another set of tariffs that will apply to goods imports from countries which subsidise excess manufacturing capacity. This amounts to unfair trade practices, according to the US. This actually results in a tide of low-cost products in global markets that American producers can’t compete with, Trump has argued.
Additionally, India is one of only five countries (including China) which have been targeted for a tariff that can climb to a fantastic 100% for continuing to buy Russian crude oil. In June, Russia was India’s biggest supplier of crude oil.
