United States threatens new tariffs on India as trade negotiating leverage

The United States has announced a proposal to impose an additional 12.5% tariff on certain Indian exports, part of a broader set of duties covering products from China, Japan, South Korea, Brazil and Switzerland, while a 10% rate would apply to goods from Canada, Mexico, the EU, the United Kingdom and Pakistan. Analysts say the tariff threat is being used as pressure to secure a tougher bargain in ongoing trade talks with New Delhi, following a Section 301 investigation into alleged unfair trade practices.

U.S. Trade Representative chief negotiator Brendan Lynch visited Delhi this week to accelerate discussions on a bilateral trade agreement after an interim framework was reached in February. The Indian government described the engagements as cooperative and pragmatic, reaffirming its commitment to a mutually beneficial deal. The new tariff proposal follows a recent reduction of U.S. tariffs on India to 18% from a peak of 50% last year and appears aimed at replacing duties that were rejected by the U.S. Supreme Court earlier this year.