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The United States unveiled fresh tariff slabs of 10 and 12.5 per cent on several economies under its Section 301 on Thursday. India has been placed in the lower 10 per cent tariff category. According to officials, New Delhi was initially slated for a 12.5 per cent tariff but it secured the lower rate following productive discussions on labour practices.

US Announces New Tariffs; India Faces 10% Duty

This comes as the Office of the US Trade Representative (USTR) on Thursday announced tariffs ranging from 10 per cent to 12.5 per cent on 60 economies as part of action directed by US President Donald Trump over what it described as inadequate measures to prohibit the import of goods produced with “forced labour”.

According to the USTR, India is among 17 economies that will face the lower 10 per cent tariff. The slab comprises of 17 economies which feature include the United Kingdom, Canada, Indonesia, Mexico and Bangladesh.

Officials told ANI that India had originally been considered for a 12.5 per cent tariff but was placed in the 10 per cent category following constructive engagement with the United States on labour practices.

India, UK, EU, Canada Hit by New US Tariffs

Ranging from 10% to 12.5%, the new duties hit major trading partners including India, the UK, EU, Canada and Japan and take effect Friday.

The announcement was made by the Office of the US Trade Representative on Thursday, in what it called was Ambassador Jamieson Greer’s taking final action, at President Trump’s direction to impose tariffs on 60 economies for their “failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor”.

What Is Section 301 and Who Faces 10% or 12.5% Tariffs?

Section 301 of the Trade Act of 1974 grants the US Trade Representative the authority to enforce tariffs or other punitive actions against nations found to be using unfair trade practices.

The statement announced two sets of tariffs- 10 percent and 12.5 per cent and said that, “10 percent is the appropriate rate of Section 301 duties for investigated economies that (i) impose a forced labor import prohibition; (ii) have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade; or (iii) have imposed a partial regime with the effect of preventing the importation of certain forced labor goods. These economies are: Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.”

It further noted, “10 percent or 12.5 percent, net of Most-Favored-Nation (MFN) rate is the appropriate rate of Section 301 duties for certain products of the European Union, Taiwan, Japan, Korea, and Switzerland that are not otherwise exempted…12.5 percent is the appropriate rate of Section 301 duty for all other investigated economies.”

Why the US Introduced New Section 301 Tariffs

As per the Office of the Trade Representative, Ambassador Greer said, “President Trump recognizes that decades of moral suasion have not eradicated forced labor from global supply chains. The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,”

He praised the partners who had taken swift action in this regard and said, “I am encouraged by the trading partners who have moved quickly to adopt forced labor import prohibitions, and look forward to ensuring their effective enforcement.”

The major development comes after the USTR in March this year initiated investigations of 60 economies under Section 301(b) of the Trade Act of 1974 to determine whether the practices of these economies to the failure of enforcing a ban on the importation of goods produced with “forced labour”.

This was followed with consultations with more than 45 governments along with several public hearings into the investigation.

The official statement noted that the USTR received, reviewed, and analyzed over 1,600 written comments on the proposed responsive action.

This marks the latest escalation in the global trade war that President Trump reignited upon returning to office in January last year.

The move follows an earlier ruling this year by the US Supreme Court that many tariffs imposed under emergency powers were unlawful, prompting the president to pursue alternative legal routes to advance his signature trade agenda

Inputs from ANI

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