As the deadline approaches, India chooses to confront directly and is preparing a tough response to U.S. auto tariffs
The trade friction between the United States and India has intensified, with India notifying the WTO that it will take retaliatory measures against U.S. auto tariffs. The U.S. has imposed a 25% tariff on Indian automobiles and parts, which is expected to affect India's annual exports of $2.9 billion. India demands that a trade agreement be reached before July 9 to avoid the implementation of new tariffs, but the negotiation prospects are unclear, with both sides having differences on "industry access" and "reciprocal tariffs."
US-India trade friction escalates.
On July 4th, Xinhua News Agency cited foreign media reports that India notified the World Trade Organization on the 4th that due to the impact of the tariffs imposed by the United States on automobiles and parts on Indian exports, India plans to impose retaliatory tariffs on the United States.
After the announcement, the yield on India's 10-year government bonds fluctuated little and remained basically flat. The Indian rupee weakened slightly, falling about 0.1% as of the time of publication.
India retaliates against US auto tariffs
CCTV News previously reported that Trump announced a 25% tariff on imported automobiles and parts. This measure is expected to affect $2.9 billion of India's exports to the US each year, resulting in Indian exporters having to pay approximately $724 million more in tariffs. The US government calls this a "safeguard measure," claiming it is to protect domestic industries from impact.
The Indian government is dissatisfied with this and has formally notified the World Trade Organization (WTO) that since the US is imposing such high taxes on Indian exports, India will also impose the same amount of tariffs on US products.
In June, India officially initiated the "consultation" process at the WTO to challenge the US auto tariffs. India believes that the "safeguard" tariffs imposed by the US are unfair to Indian exporters. Indian officials stated that a trade agreement with the US can only be reached before July 9th if interests are met. The "consultation" process is the first step in the WTO dispute resolution process, and if both parties cannot reach an agreement, it may escalate to an expert panel ruling.
Currently, both the US and India were originally working to finalize a temporary trade agreement, aiming to reach an agreement before July 9th. This date is critical because Trump stated that countries would start paying new tariffs on August 1st. If an agreement can be reached before July 9th, it may avoid the formal implementation of tariffs.
However, now, due to the US's tough stance on tariffs and India's unwillingness to make concessions, the prospects for negotiations have become very uncertain. Earlier reports indicated that India does not want to passively accept US demands and emphasized that the core issues of "industry access" and "reciprocal tariffs" must be resolved. India also refuted Trump's claim of "trade for Pakistan ceasefire."
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