Context: U.S. Moots 12.5% Tariff for ‘Forced Labour’ on India, 53 Other Nations
The U.S. Trade Representative has proposed a 12.5% tariff on imports from India and 53 other countries, alleging inadequate action against goods produced through forced labour. India is engaging with the U.S. while negotiating an interim trade agreement.
Section 301 of the U.S. Trade Act, 1974
Purpose
- Allows the U.S. Trade Representative to investigate and act against trade practices considered unfair or harmful to U.S. commerce.
Actions
- Tariffs
- Import restrictions
- Suspension of trade concessions
Grounds
- Unfair trade practices
- IPR violations
- Market-access barriers
- Labour-related concerns
India
- India is currently under a Section 301 investigation.
- Similar provisions were used extensively during the U.S.–China trade dispute.
WTO Angle
Issue
- Section 301 is a unilateral trade measure, whereas WTO prefers disputes to be settled through its dispute-settlement system.
Possible WTO Concerns
- Violation of Most-Favoured Nation principle under Article I of GATT 1994.
- Violation of tariff commitments under WTO rules.
