What is the crime of 54 countries including US and India in preparing to ‘punish’ 12.5% ​​tariff?

America, which imposes tariffs on various countries of the world for various reasons, is once again in the news. This time also tariff is the reason. India’s name is also included among the 54 countries on which preparations are being made to impose 12.5% ​​additional tariff. This is the reason why the concern of Indian businessmen has increased with the arrival of these news. America says that this tariff will be imposed on those countries which have not been able to ban the import of goods made through bonded labour. India has rejected these allegations and said that America should end such investigations.

The US Trade Representative (USTR) has proposed to impose an additional 12.5 percent tariff on 54 countries including India. This proposal has emerged after an investigation. In fact, the US had initiated an investigation against 60 countries on the grounds that they had failed to ban and effectively enforce a ban on the import of goods made from forced labour. It is proposed that an additional tariff of 10 percent should be imposed on the 6 countries which have agreed to implement minimum restrictions and 12.5 percent additional tariff should be imposed on the remaining 54 countries.

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What is USTR saying?

US Trade Representative Jamieson Greer said in a statement, ‘It is unacceptable for our most important trading partner to fail to ban the import of goods made from forced labor. This creates a situation in which American workers face unequal competition on a global scale. We will no longer tolerate this inequality. Rejecting the allegations of bonded labour, India has demanded the US to end these investigations. India says such issues should be resolved within the framework of the ongoing trade negotiations between the two countries.

Jamieson Green said some trading partners have taken initial steps to stop the import of goods made from forced labour. These include commitments made under the United States-Mexico-Canada Agreement (USMCA) and reciprocal trade agreements. However, he said every trading partner must do more to ensure that global trade does not encourage or perpetuate forced labour. The US Trade Representative said in a statement that 54 countries, including India, China, Japan, Brazil, Australia, Britain and Saudi Arabia, have failed to impose and effectively enforce a ban on the import of goods made from forced labour.

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What is the issue of bonded labour?

Whenever any person is made to work against his will, it is called bonded labour. Many times such work is done by threatening, burdening with debt, withholding salary or honorarium or confiscating important documents. If we look at international labor standards, no person can be made to work in this manner and if any company makes such work then action should be taken against it. America believes that these countries are able to make cheap products only because of bonded labor and this is causing loss to America.

USTR says that such methods are being adopted in India and due to this India is successful in making cheap products. However, India has vehemently rejected these allegations and demanded that the investigation be ended.

10% tariff proposed on 6 countries

According to the statement, six economies – Canada, Ecuador, the European Union, Indonesia, Mexico and Pakistan – have banned the import of goods made from forced labor but have not been able to effectively enforce it. The US Trade Representative has proposed imposing an additional 10 percent duty on economies that have imposed a ban on the import of goods involving forced labor, or have committed to establish and enforce such a ban under a reciprocal trade agreement, or have implemented a partial regime prohibiting the import of certain types of such goods.

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The same statement said, ‘For all other economies, the US Trade Representative has said that an additional tariff of 12.5 percent will be imposed.’ This 12.5 percent additional tariff will be applicable on 54 countries, which also includes India. USTR has also proposed a special mechanism for the textile sector, under which a specified quantity of apparel and textiles imported into the US from certain countries could be allowed to enter the US at a reduced duty rate. It has asked interested parties to submit applications and a summary of their statements to attend the hearing by June 22. Besides, written comments have also been sought till July 6. “USTR will hold a hearing on these proposed actions on July 7,” the statement said.