HomeEconomy NewsTrump's reciprocal tariffs 'brazenly' violate WTO obligations, says former ambassador Jayant Dasgupta
Trump's reciprocal tariffs 'brazenly' violate WTO obligations, says former ambassador Jayant Dasgupta
Speaking to CNBC-TV18, former ambassador Jayant Dasgupta said that the differential rates applied to various countries – such as India, China, and the EU – contravene the WTO's 'Most Favoured Nation' (MFN) principle, which generally requires equal treatment for all member nations' exports. Furthermore, he noted that the new tariffs far exceed the committed upper limits (bound tariffs) the US agreed to uphold within the WTO framework.
The sweeping reciprocal tariffs announced by the US administration, including a 27% levy on Indian goods, likely violate fundamental World Trade Organisation (WTO) rules, according to former ambassador Jayant Dasgupta.
Speaking to CNBC-TV18, Dasgupta highlighted that the differential rates applied to various countries – such as India, China, and the EU – contravene the WTO's 'Most Favoured Nation' (MFN) principle, which generally requires equal treatment for all member nations' exports.
Despite the global trade upheaval and potential rule violations, the immediate impact on India's export ambitions, particularly in the mobile phone sector, is expected to be minimal. Pankaj Mohindroo, Chairman of the India Cellular & Electronics Association (ICEA), explained that key competitors like China and Vietnam are facing even higher tariffs (54% and 46% respectively), giving India a relative advantage for now. "Fortunately, at the moment the way these tariffs have been rolled out, there is going to be no impact because the two competing nations- which is China and Vietnam have got a higher tariff," Mohindroo observed.
However, this doesn't mean smooth sailing ahead. Mohindroo cautioned about the potential for overall US demand to shrink as a result of the tariffs, which could indirectly affect Indian exporters over time. He also anticipates a brief period of uncertainty and readjustment in the coming weeks as markets digest the changes, though he stressed, "We don't see a threat to our electronic exports at the moment at all."
Looking ahead, India's strategy should focus on continued engagement and diplomacy, according to Dasgupta. He suggested that the tariffs might be an aggressive opening move by the US to bring countries to the negotiating table. Therefore, India's best approach involves continuing negotiations, potentially towards the ongoing bilateral trade agreement. Exploring strategic concessions in areas that don't compromise core interests, such as addressing non-tariff barriers like quality control orders, could also be beneficial.
Dasgupta recommended forming alliances and coordinating responses with other nations similarly affected by the US tariffs, like the European Union, Japan, and Canada, to collectively pressure for a rollback.
While the situation introduces short-term uncertainty, experts believe major disruptions to India's trade are not imminent, provided a strategic approach involving negotiation and collaboration is pursued.
Watch accompanying video for entire discussion.
Speaking to CNBC-TV18, Dasgupta highlighted that the differential rates applied to various countries – such as India, China, and the EU – contravene the WTO's 'Most Favoured Nation' (MFN) principle, which generally requires equal treatment for all member nations' exports.
Furthermore, he noted that the new tariffs far exceed the committed upper limits (bound tariffs) the US agreed to uphold within the WTO framework. "He (Donald Trump) has violated those obligations which the US had made as a member of the WTO in a very brazen fashion," Dasgupta stated.
Despite the global trade upheaval and potential rule violations, the immediate impact on India's export ambitions, particularly in the mobile phone sector, is expected to be minimal. Pankaj Mohindroo, Chairman of the India Cellular & Electronics Association (ICEA), explained that key competitors like China and Vietnam are facing even higher tariffs (54% and 46% respectively), giving India a relative advantage for now. "Fortunately, at the moment the way these tariffs have been rolled out, there is going to be no impact because the two competing nations- which is China and Vietnam have got a higher tariff," Mohindroo observed.
However, this doesn't mean smooth sailing ahead. Mohindroo cautioned about the potential for overall US demand to shrink as a result of the tariffs, which could indirectly affect Indian exporters over time. He also anticipates a brief period of uncertainty and readjustment in the coming weeks as markets digest the changes, though he stressed, "We don't see a threat to our electronic exports at the moment at all."
Looking ahead, India's strategy should focus on continued engagement and diplomacy, according to Dasgupta. He suggested that the tariffs might be an aggressive opening move by the US to bring countries to the negotiating table. Therefore, India's best approach involves continuing negotiations, potentially towards the ongoing bilateral trade agreement. Exploring strategic concessions in areas that don't compromise core interests, such as addressing non-tariff barriers like quality control orders, could also be beneficial.
Dasgupta recommended forming alliances and coordinating responses with other nations similarly affected by the US tariffs, like the European Union, Japan, and Canada, to collectively pressure for a rollback.
While the situation introduces short-term uncertainty, experts believe major disruptions to India's trade are not imminent, provided a strategic approach involving negotiation and collaboration is pursued.
Watch accompanying video for entire discussion.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!