NEW DELHI: Fresh uncertainty awaits India and several other countries, with the US Trade Representative moving ahead with just one of the two probes against American trading partners, as the deadline for phasing out the 10% additional tariff approaches.From Tuesday to Thursday, USTR will hold public hearings on the probe related to forced labour which involves 60 economies.While USTR has proposed 12.5% tariff on over 50 countries, including India, for their alleged failure to crack down on goods using forced labour – a charge that govt has denied – it is yet to make public its preliminary findings in the other case of alleged structural excess capacity in several sectors.Policymakers and experts indicated that given the pace of the probe, the US is likely to replace the 10% tariff in place until July 24 with tariff related to forced labour and then use the additional tariff on structural overcapacity as a bargaining chip to get countries to the negotiating table so that bilateral trade deals can be finalised. In Feb, the Trump administration had responded with the 10% tariff – which can be in place for 150 days – after the US Supreme Court trashed the reciprocal tariffs imposed last Aug. That also meant that the trade deal with countries, such as India, had to be put on the backburner.Although India and the US have been engaged in negotiations on firming up the framework agreement for the first tranche of the trade deal, including at the ministerial level, the final tariff – the key to operationalise it – can only be decided once the Trump administration is ready with its revamped tariff plan. India has sought that it should retain a comparative advantage compared with rival nations such as China, Vietnam, Bangladesh and Asean countries.Exporters can, however, heave a sigh of relief in case the 10% tariff is replaced with a 12.5% levy, as has been proposed so far, since it will cover a majority of the countries, which are their competitors in different product segments.
