New Delhi: India will take up with the US authorities their “unfortunate” decision to hike import duty on steel and aluminium products, commerce and industry minister Suresh Prabhu.
The Trump administration last week announced hiking import duty on steel and aluminium to 25% and 10% respectively, triggering fears of a global trade war. “The measures are unfortunate and we will take up these issues with my US counterpart and I will definitely try to explain to them the necessity for working together through multilateral trading platform as well as bilateral trading platform,” Prabhu told PTI in an interview.
The ministry is already studying the impact of duty hike as India exports these goods worth about $1.3 billion a year to America. With hike in tariffs by the US government, exports of these products to the American market will become expensive and could impact the competitiveness of domestic items.
S&P Global Ratings has said that the decision could result in retaliatory action from the EU and China, triggering a trade war and hurting global economic growth. A report by Kotak Institutional Equities has also stated that export of steel to the US from various countries is likely to fall by 9-14 million tonne due to this measure.
Major steel exporters to the US comprise Canada, Brazil, South Korea, Mexico and Russia which together account for close to 60% of the shipments. India exported close to 0.9MT steel to America in 2017. Some trade experts have suggested that India should drag the US in the World Trade Organization’s (WTO) dispute mechanism against the move as it is not in compliance with the global trade norms.
Further, the issue is likely to be flagged by certain participants of the mini-ministerial meeting of WTO members called by India on 19-20 March in New Delhi. The US and China would send their political representatives for the meeting. The idea of the meeting is to “create an atmosphere, so that this negativity around global trade and multilateral trading system should reduce and all the countries should benefit from open trade”, Prabhu said.