The World Trade Organization (WTO) has just ruled against the US in a decision that prevents US importers from charging high tariffs to India’s steel products. India argued that certain countervailing duties (CVD) imposed by the US were not in line with certain provisions of the Agreement on Subsidies and Countervailing Measures (ASCM).
This will greatly strengthen India’s steel presence in the States, which hasn’t seen a consistent practice by the US Department of Commerce in trying to import hot-rolled carbon steel flats into the country. The US will now be forced to alter domestic laws to comply with WTO laws already in place.
The dispute was levied as Washington was charging a 300% tariff to many Indian steel companies. The US argument was that a portion of the iron ore used by these companies came from a public sector mine – National Mineral Development Corporation. That would make the steel – at least in part – subsidized by the Indian government. The mine supplies companies like Tata and Essar.
The US steel industry has responded by criticizing the ruling. Thomas J. Gibson, CEO of American Iron and Steel Institute (AISI) has stated, “The WTO decision significantly weakens the effectiveness of US trade laws.” AISI is still cataloguing exactly how this ruling will affect other trade agreements.
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