USTR report on Section 301, proposed 12.5% tariff cast fresh shadow on India-US trade talks

US tariffs: Even as India and the US are in the midst of negotiations to finalise the last 1 per cent of interim trade pact, investigations by the US Trade Representative has alleged that India is amongst 54 countries that has failed to legally prohibit import of goods made with forced labour and has proposed additional tariffs of 12.5 per cent.
 
The report has been released at a time when a US delegation led by Assistant USTR Brendan Lynch is visiting New Delhi from June 1 to 4 to continue discussions on finalising the interim BTA.
 
Both US and India have indicated that the deal is almost finalised with only the last leg of negotiations left. However, Indian sources have indicated that the tariff rate as well as the Section 301 investigations will have to be discussed. India is keen on understanding the tariff being offered by the US after the US Supreme Court struck down the reciprocal tariffs. Further, it has also been clear that the Section 301 investigations against India should be dropped and no additional tariff should be imposed on it.

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In its response to the investigations launched in March this year, India had firmly denied the allegations. The report now may feature in the ongoing trade negotiations between India and the US and India is also likely to submit further comments opposing the findings.
 
The US was investigating 60 countries for forced labour and the investigation has proposed new tariffs of 10-12.5 per cent. “The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable.  This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” said USTR Jamieson Greer in a press statement.  

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Following the release of the report, the USTR has said interested persons can submit requests to appear at the hearings by June 22 and written comments by July 6. The USTR will then hold hearings about the proposed actions in these investigations on July before firming up its final plan on proposed tariffs.  
 
India is amongst the 54 economies that have failed to impose a legal prohibition on the importation of goods produced wholly or in part with forced labour and to effectively enforce such a prohibition, the report alleged. The list of countries include Algeria, Angola, Argentina, Australia, Bangladesh, Brazil, China, Hong Kong, Israel, Japan, United Arab Emirates and UK among others.