US Defends Auto Tariffs as National Security Measure in WTO Dispute with India

The United States has firmly rejected India’s claim at the World Trade Organization (WTO) that its 25% tariffs on Indian automobiles and auto parts are safeguard measures, asserting instead that these duties are imposed to protect national security. The US argues that India’s proposal for retaliatory tariffs lacks legal grounding under WTO rules.

In a WTO communication dated July 17, the US stated that the tariffs, enacted under Section 232 of the Trade Expansion Act of 1962, aim to address imports threatening America’s national security. “These actions are not safeguard measures. Accordingly, there is no basis for India’s proposal to suspend concessions,” the US delegation emphasized, refusing to discuss the tariffs under the WTO’s Agreement on Safeguards.

India, however, contends that the US tariffs, effective from May 3, 2025, function as safeguard measures harming its domestic industry. New Delhi has reserved the right to impose retaliatory duties, potentially increasing tariffs on select US products to offset an estimated $723.75 million in annual duty collection from $2.895 billion of affected Indian exports.

Also Read: "India Holds Back on Russia-China Plan!" - RIC Revival Hangs in Balance

This dispute echoes a similar US rejection of India’s WTO challenge against steel and aluminum tariffs, which were raised from 25% to 50% in June 2025. India had previously retaliated in 2019 by targeting 28 US products, including almonds and apples, and may adopt a similar approach if consultations fail.

Despite the escalating trade tensions, an Indian official clarified that reserving retaliatory rights is a procedural step under WTO rules and will not disrupt ongoing bilateral trade talks. The Indian delegation is currently in Washington for the fifth round of negotiations, aiming to finalize the first phase of a trade agreement by September or October to boost bilateral trade to $500 billion by 2030.

Also Read: Goa’s Bold Plan to Revolutionize Travel: India’s First Air-Sea Tourism Hub Unveiled!