In response to the imposition of import duties on steel and aluminium by the United States, the Indian government in May 2018 approached the WTO dispute settlement mechanism. In recent years, India’s exports of steel and aluminium products to the US stood at about USD 1.5 billion per year.
In March 2018, the United States imposed 25% and 10% of additional import duty on certain steel products and aluminium products from all countries except Canada, Mexico, Australia, Argentina, South Korea, Brazil and the European Union. India in its request for consultations argues that the United States violated its obligations arising from the GATT 1994 (General Agreement on Tariffs and Trade) and the Agreement on Safeguards. In particular, India claims that the US import duty is not in compliance with Articles I, II, X, XI and XIX of the GATT 1994 and 2,3,4,5,7, 9, 11, 12 of the Agreement on Safeguards. The measures in question appear to nullify or impair the benefits accruing to India directly or indirectly under the covered agreements. It is worth mentioning that China, Russian Federation, the European Union, Thailand, Hong Kong, China requested to join the consultation due to their substantial trade interests. India is not the only country challenging duties imposed on imports of steel and aluminium products by the US. China, the EU, Canada, Mexico, Norway, Russian Federation, Turkey and Switzerland also approached the WTO dispute settlement mechanism and requested for consultations. Several WTO panels have been already established.
The Trump administration has argued that imports of steel and aluminium have weakened the country’s industrial base, in particular its ability to produce tanks, weapons and armored vehicles. “We take the view that without a strong economy, you can’t have strong national security,” said Wilbur Ross, the US Commerce Secretary. In response to the India’s request for consultations and alleged violation of WTO rules, the US stated that the imposed measures are issues of national security. Thus, these measures should not be susceptible to review or capable of resolution by WTO dispute settlement and that the consultations provisions in the Agreement on Safeguards are not applicable. On 8 November 2018, India requested the establishment of a panel. According to Reuters, India has been considering targeting U.S. exports of soya oil, palm oil and cashew nuts in its retaliation.