"US Congress Institutionalises Tariff Regime; India's Export Strategy Under Pressure"
Section 301 (Trade Act of 1974)
US law authorising tariffs against foreign 'unreasonable or discriminatory' trade practices
Section 232 (Trade Expansion Act of 1962)
US law permitting tariffs on national-security grounds, used for steel and aluminium
US trade law has historically provided the executive branch with sweeping unilateral powers to impose tariffs, most notably through Section 301 of the Trade Act of 1974, which allows the government to act against foreign trade practices deemed 'unreasonable or discriminatory'. For decades, the World Trade Organization (WTO) served as a multilateral check on such unilateralism — its dispute-settlement mechanism repeatedly found US unilateral tariffs inconsistent with Most Favoured Nation (MFN) obligations under the General Agreement on Tariffs and Trade (GATT). The post-1995 WTO era was characterised by a broad consensus that tariff levels, once bound under WTO schedules, would remain stable and predictable.
India's trade relationship with the US is structurally asymmetric. The US is India's largest single export destination, with pharmaceuticals, IT services, textiles, and engineering goods forming the backbone of Indian exports. India runs one of its few bilateral merchandise surpluses with the US, which has historically made it a target of US trade pressure. India's multilateral trade obligations are administered through WTO membership, while domestic trade policy is managed by the Directorate General of Foreign Trade (DGFT). The current geopolitical context — where both countries share strategic interests in counterbalancing China — has introduced a diplomatic dimension into what were previously purely commercial disputes, complicating India's ability to push back firmly.
The US tariff architecture has evolved into a multi-layered system drawing on several distinct legal authorities simultaneously. Section 232 of the Trade Expansion Act of 1962 allows tariffs on national-security grounds — used to impose a 25% duty on steel and aluminium. Section 301 of the Trade Act of 1974 targets 'unfair' foreign trade practices and has been used to impose tariffs on 60 economies, ostensibly citing forced-labour concerns. MFN tariffs under WTO schedules form the baseline, on top of which these additional duties are stacked. The result is a layered tariff system: a cotton T-shirt now faces a 26.5% cumulative tariff (16.5% MFN plus 10% Section 301), while an auto part faces 27.5% (2.5% MFN plus 25% Section 232).
Critically, the US is now moving to legislatively entrench this tariff regime. The Russia sanctions bill — which would authorise tariffs of up to 100% on countries purchasing Russian oil — passed the US Senate with an 86-12 bipartisan vote, signalling that tariffs are no longer merely executive instruments subject to reversal but are becoming durable statutory policy. …
Consider the following statements:
Statement-I:
India does not import apples from the United States of America.
Statement-II:
In India, by law, the import of genetically modified transformed food is prohibited without the approval of the competent authority.
Which one of the following is correct in respect of the above statements?
Which of the following has/have occurred in India after its liberalization of economic policies in 1991?
1.Share of agriculture in GDP increased enormously.
2.Share of India's exports in world trade increased.
3.FDI inflows increased.
4.India's foreign exchange reserves increased enormously.
Select the correct answer using the codes given below:
Which of the following statements regarding US trade law authorities is/are correct?
1.Section 301 of the Trade Act of 1974 authorises tariffs against foreign countries with 'unreasonable or discriminatory' trade practices.
2.Section 232 of the Trade Expansion Act of 1962 authorises tariffs on national-security grounds.
3.MFN tariff rates under WTO commitments can be unilaterally raised by the US executive without any domestic legal authority.
Select the correct answer using the code given below:
Consider the following statements regarding India's pharmaceutical trade with the United States:
1.India supplies approximately half of all generic prescriptions dispensed in the United States.
2.Approximately 38% of India's total pharmaceutical exports are destined for the US market.
3.Generic medicines from India currently face a 25% Section 232 tariff in the United States.
Which of the above statements is/are correct?
The term 'tariff substitution', as used in the context of US trade policy, refers to:
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