The produce industry received major news with India’s June 22 announcement that it will lift its retaliatory tariffs on U.S. products including apples, walnuts, chickpeas, and lentils in the next 90 days.
The announcement came in the wake of a state visit to President Biden by Indian prime minister Narindra Modi last week.
“Prime Minister Modi’s visit has underscored the importance of the U.S.-India bilateral relationship and our cooperation on a range of shared priorities. Today’s agreement represents the culmination of intensified bilateral engagement over the last two years, including through the U.S.-India Trade Policy Forum, to deepen our economic and trade ties,” said U.S. trade representative Katherine Tai.
“As a result of our work,” Tai continues, “U.S. agricultural producers and manufacturers will now enjoy renewed access to a critical global market, and we will strengthen our trade relationship with one of our closest partners. I look forward to continue to working with my counterpart, Minister Goyal, as we identify additional ways to bring our people and our economies together.”
Jorge Sanchez, of Northern Fruit Company in East Wenatchee, WA BB #:113634, commented, “India was a critical market for the Washington apple industry, and the tariffs hut producers of Red Delicious apples especially hard in the last few years.”
The U.S.-India joint statement can be found here.
To view the matter in context, the agreement terminated six disputes placed by the two nations with the World Trade Organization, three filed by the United States, and three by India.
Two of the three disputes filed by the Americans have to do with “Certain Hot-Rolled Carbon Steel Flat Products from India” and “Certain Measures on Steel and Aluminum Products.”
This is significant because the Indian tariffs on apples were placed in retaliation for U.S. actions against Indian steel in 2018 and 2019 by the previous presidential administration.
The Indian apple tariff was a cumulative 70 percent. It included a supplemental tariff of 20 percent upon the standard tariff of 50 percent from other exporting nations.
As a result, U.S. growers had lost a great deal of the Indian apple market to Turkey, Iran, and some apple exporting nations from the European Union (EU).
Washington state apple exports to India fell from $120 million in value in 2017-18 to $760,000 this season, with the market share falling from 53 percent then to less than 1 percent this season.
Trade is a study in the fine art of retaliation. When faced with U.S. duties on steel and aluminum, India couldn’t reply tit-for-tat by placing duties on U.S. steel, because India is an exporter, not an importer, of steel to the U.S. They had to go for U.S. exports of comparable value.
The ordinary person looks at news reports of major state visits by figures such as Biden and Modi and wonders if they are anything more than ceremonial. Perhaps the visits are, but they often reflect real progress—most of it, of course, reached well beforehand. Modi’s visit to Washington, DC, appears to indicate that the trade war between the U.S. and India is coming to a close.
