India faces lower tariff rate of 10%, proclamation issued

PTI

New York/Washington

India now faces a lower tariff rate of 10 per cent, down from 18 per cent, after US President Donald Trump announced a new global levy on items imported into America in the wake of the Supreme Court verdict against his sweeping tariffs.

In a proclamation titled ‘Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems’, Trump said he is imposing, for a period of 150 days, a “temporary import surcharge of 10 per cent ad valorem” on articles imported into the United States,
effective February 24.

Given this new tariff rate of 10 per cent, which will be applicable on countries around the world, Indian goods being imported into the US would no longer be subject to the 18 per cent tariff rate that had been decided on following the announcement of a framework for an Interim Agreement on trade between India and the US.

In a major setback to Trump’s pivotal economic agenda in his second term, the US Supreme Court, in a 6-3 verdict written by Chief Justice John Roberts, ruled that the tariffs imposed by Trump on nations around the world were illegal and that the president had exceeded his authority when he imposed
the sweeping levies.

Earlier this month, as the US and India announced they reached a framework for an Interim Agreement on trade, Trump issued an Executive Order removing the 25 per cent punitive tariffs imposed on India for its purchases
of Russian oil, with the US President noting the commitment by New Delhi to stop directly or indirectly importing energy from Moscow and purchasing American
energy products.

Under the trade deal, Washington would charge a reduced reciprocal tariff on New Delhi, lowering it from 25 per cent to 18 per cent.

Trump signed the proclamation “imposing a temporary import duty to address fundamental international payments problems and continue the Administration’s work to rebalance our trade relationships to benefit American workers, farmers,
and manufacturers”.

A fact sheet issued by the White House said Trump is invoking his authority under Section 122
of the Trade Act of 1974, which “empowers the President to address certain fundamental international payment problems through surcharges and other special
import restrictions”.

The proclamation imposes, for a period of 150 days, a 10 per cent ad valorem import duty on articles imported into the United States. The temporary import duty will take effect February 24 at 12:01 am eastern standard time.

The fact sheet noted that some goods will not be subject to the temporary import duty because of the needs of the US economy or in order to ensure the duty more effectively addresses the fundamental international payments problems facing the United States.

The goods include certain critical minerals, metals used in currency and bullion, energy, and energy products; natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States or grown, mined, or otherwise produced in sufficient quantities to meet domestic demand; certain agricultural products, including beef, tomatoes, and oranges; pharmaceuticals and pharmaceutical ingredients; certain electronics; passenger vehicles, certain light trucks, certain medium and heavy-duty vehicles, buses, and certain parts of passenger vehicles, light trucks, heavy-duty vehicles, and buses and certain aerospace products.

Trump lashed out at the Supreme Court justices who ruled against him, calling them “fools and lapdogs”.