US Proposes 12.5% Tariffs on India

The US has proposed fresh duties of 12.5% on products from a host of countries, including India, claiming they have not cracked down on forced labor.

On June 2, the Office of the US Trade Representative (USTR) named 54 economies that, it alleged, had failed to “impose and effectively enforce” a ban on the importation of goods produced using forced labor.

In addition to India, the list includes Angola, Brazil, China, Hong Kong, Israel, Switzerland and the United Arab Emirates (UAE).

A further six jurisdictions have “failed to effectively enforce a prohibition” on such imports, including Canada and the European Union, the agency said.

Out of these, countries that have banned imports of goods made with forced labor, or committed to doing so, will face 10% tariffs on shipments into the US under Section 301(b) of the Trade Act, it added. The other economies will be subject to a rate of 12.5%. It did not clarify which countries were in which category, but Reuters reported that China, India, Nigeria, Japan, South Korea, Vietnam, Australia and New Zealand were among those that would be subject to 12.5% tariffs.

“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable,” said Jamieson Greer, US trade representative. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity.”

The plans are “not yet final,” India’s Ministry of Commerce & Industry noted in statement the following day.

The new levies “are intended to functionally replace” the current 10% tariffs, which are under Section 122 of the Trade Act, explained Sara Yood, CEO and general counsel of the Jewelers Vigilance Committee (JVC). The current duties have a time limit and will expire July 24, and there is no implementation date yet for the new regime, she added.

The American government agency called for written comments on the proposal by July 6 and will hold a hearing about the actions on July 7. Anyone who wants to appear at the hearing must submit a request by June 22.

Image: Chess pieces with the US and Indian flags in the background. (Shutterstock)