US Rejects The WTO Notice
In March 2018, under Section 232 of the Trade Expansion Act, the Trump administration imposed 25% tariff on steel imports and 10% tariff on aluminium imports. In justitification he claimed national security concerns, arguing that dependence on foreign metals could compromise U.S. defense manufacturing. India among other countries, strongly opposed this move, calling it protectionist and not consistent with WTO rules.
India's economic Loss
The tariffs repotedly affected $7.6 billion worth of Indian exports. India had tried bilateral talks and WTO consultations since 2018, but with no resolution, India is now escalating the issue.
India's move at WTO
On May 12, 2025, India notified the WTO's Dispute Settlement Body (DBS) about intention to impose relatiatory tariffs on unspecified U.S. goods. The action is formed as a countermeasure under Article 8 of the WTO Agreement on Safeguards.
India argues U.S. tariffs are safeguard measures (which protect domestic industry from import surges), not national security based. Such measures must follow WTO rules, including prior notification and compensation, which the U.S. allegedly bypassed.
Legal and Strategic Dimensions
WTO Jurisdiction Dispute U.S. claims these are national security measures and are non-justiciable under WTO rules and India claims these are de facto safeguard measures, thus subject to WTO review and retaliation.
India Rights under WTO if a member imposes a safeguard without proper procedure, others can retaliate without waiting for a WTO ruling. India is invoking this right, setting a precedent similar to that used by China, EU and Canada in past disputes with the U.S.
India first filed a dispute at the WTO in 2019, claiming that the U.S. tariff were inconsistent with WTO obligations. While the dispute was still pending, India notified that the WTO of its intention to suspend concessions and retaliate by imposing higher import duties on 29 U.S. products. These includes Almonds, Apples, Walnuts and certain metal products.
The retaliation was estimated to target around $7.6 billion in U.S. trade value, roughly equivalent to the loss india incurred due to the U.S. tariffs.
On May 22, 2025, the U.S. officially rejected India's retaliatory notice at the WTO. The U.S. argument is based on a legal technically the U.S. claims that Section 232 tariffs are not safeguard measures. Therefore, they are not covered under the WTO's Agreement on Safeguards. This means, according to the U.S. India cannot legally retaliate under the rules India invoked. Essentially the U.S. is saying this is not safeguard, its nationa security. WTO rules don't apply here.
Escalation
The U.S. announced it was doubling its Section 232 tariffs, increasing them to 50% on steel and 20% 0n aluminium. This was a major escalation, further straining bilateral ties India as a WTO member again sought recourse through the multilateral system.
India disagrees, arguing WTO's Dispute Statement Body (DSB) had already ruled that similar U.S. Section 232 tariffs (challenged by other countries like Turkey and Norway) violated WTO rules. India believes it has the legal right to suspend equivalentn concessions under Article 8 of the safeguards Agreement and GATT Article XIX. India has maintained that the U.S. tariffs have directly hurts Indian exports and now retaliation is nacessary and lawful.
What Happens next?
India had given a 30-day advance notice (ending June 8, 2025) to the WTO about its intent to retaliate. If the dispute is not resolved, India is expected to go ahead and impose higher tariffs on the selected U.S. products after June 8.
This would esclate the trade tensions between the two countries. Impact American exporters especially in California (almonds and walnuts) and Washington (apples) who depend on the Indian market. Possibly lead to counter retaliation or a trade war in specific sectors.
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