Indira Rajaraman: US Liberation Day Tareps Target the WTO's playing field

Copyright © HT Digital Streams Limit all rights reserved. Opinion India was consistent on the US Trade Representative (UNDR) viewing list. (AFP) Summary import levies announced by the US on April 2 have effectively declared war on global trade protocols as part of the dramatic breakdown of President Donald Trump. He is reversing the core principles of cross -border trade. The US Trade Representative (USR) is an official of the Cabinet rank whose office is embedded in the US executive office. The USTR on his website is described as “the president’s main trade adviser, negotiator and spokesperson on trade issues.” The USR, created by a legislative act in 1962, has historically declared its agreement with the World Trade Organization (WTO) as a level of the global trade field. In the years before and after the Indian Reforms of 1991, the then Oustr Carla Hills was a regular visitor to the Ministry of Trade in Udyog Bhavan, with an affected Indian offenses of the WTO rules. The mosquitoes in Udyog Bhavan should not have improved her mood. India was consistent on the USTRLOSY list. In the most recent 2025 USTRe report released on March 31, India is criticized for tariff and non-tariff-belating US exports (not updated to rates negotiated with an USRDodge in March 2025). Also read: Andy Mukherjee: Trump’s rates must push India to double the reforms against the background, let’s look at the 2025 tariff initiatives by the US, before and after the big bang on April 2. They fall into five categories in terms of disruption of the existing WTO playground. The first category was of country-oriented rates at 25% on (most) imports from two countries Mexico and Canada-to the US by a free trade treaty of the kind allowed by the WTO. These rates are contrary to the US Mexico Agreement (USMCA) of the first Donald Trump administration. But the USMCA falls outside the purpose of the WTO. The declared reason for these rates was that drugs, mainly Fentanyl and illegal migrants cross the boundaries. It is a pity that the United Nations Office on Drugs and Crime (Unodc) is ineffective in Vienna. The tariff initiative turned into reciprocal rates charged by Mexico and Canada. So, whether the US will achieve its original goal is unclear. The second category is of rates directed at other stated countries, which are in principle protected by WTO rules. China was the only country in this category before April 2. The tariff on the import of China, initially at 10%, and later up to 20% (before the big bang), is contrary to the most favorable nation (MFN) principle of the WTO, a cute set way in which the equality of treatment for all trading partners is guaranteed. Also read: Mint Snapview: Many countries will retaliate at Trump’s rates. India should not. The third category, unilateral sector-targeted (UST) rates on steel and aluminum, and recently, cars and auto parts, do not target any specific country, and therefore do not violate MFN provisions unless there will be rural releases, because the UK. However, these rates violate the bound tariff obligations required by the WTO of all member states. A fourth category of bilateral equality rates (BLR) per country was released on April 2. Land -oriented bilateral leveling is an extensive war against MFN, which has protected trade from bilateral political tensions and reduced cost of processing imports at the access point. Successive WTO/GATT rounds only worked on reciprocal reduction in rates without reference to tariff levels. MFN’s import processing advantage is so compelling that the April 2 tariff announcement, which targets nominal bilateral leveling, actually charges a uniform basic rate of 10% on all imports to the US, except for 60 countries or trade blocks. (The 10% countries in that group may charge less than 10%, which violates the level principle). The 10% replace and do not stack on existing levies. From April 9, higher rates on China (34%above the earlier 20%) and the EU (20%) will be charged. Canada and Mexico stay where they were. The new rates do not contribute to sectoral rates on steel, aluminum and cars. In addition, 11 countries are singled out for the highest rates, which care for 15 countries in total, aimed at the largest trade surplus with the US. India is unfortunately among the 11, despite the recent tariff negotiations. Also read: India’s confidence in obtaining Trump’s trade distortions is incorrectly placed on the basis on which the country -specific rates for these 11 countries must be set, has not been officially made public. A calculation of New York Times, which is perhaps a guess, shows how the additional 34% tariff on China may have been reached. The total bilateral trade deficit with China of $ 291.9 billion as a percentage of total imports from China of $ 433.8 billion equals 67%. The figure yielded 34%. The only justification I see is punishment for the US bilateral trade deficit loaded on the import of value, which was postponed by the division by two. The average tariff rate charged by India is quantified at 17% in the USTreite magazine that accompanies the announcement, although the ‘discount tariff’ with the same formula as for China works up to 26%. If the formula is used, it places a higher rate than the average rate charged by India. Finally, there is a fifth category in which the US tariff moves, and it is bilateral retribution target (BRT). When the EU responded to US steel rates by increasing levies on Bourbon -Whiskey from the US, the retaliatory US threat was a 200% tariff on EU wines. In this last category alone, the actions of both sides can work well for the good health of all involved. The author is an economist. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Donald Trump #Tariff Hike #india US Trade Mint Specials