US Tariffs: The United States is expected to delay announcing new tariffs linked to concerns over excess manufacturing capacity in major trading partner countries. The announcement is now likely to come only after the planned meeting between US President Donald Trump and Chinese President Xi Jinping next week.

New Tariffs Delayed

Bloomberg reported that the Trump administration was expected to release a report on excess manufacturing capacity before the planned summit, however, it has now been delayed. The reason for the delay is yet not clear, and the White House has not made any official comment on it. The report comes at a time when theUS House of Representatives has approved a sweeping Russia sanctions bill that will give Trump the power to impose tariffs of up to 100 per cent on countries that continue to buy Russian oil and gas.

What Is Tariffs Over Excess Manufacturing Capacity?

The tariffs on excess manufacturing capacity are linked to a US investigation into whether major trading partners are producing more goods than their domestic markets can absorb, resulting in increased exports of low-cost products. In March, the Office of the US Trade Representative (USTR) launched Section 301 investigations into 16 countries, including China, India, the European Union, Japan and South Korea.

The investigations could lead to additional tariffs if the US determines that excess manufacturing capacity is unfairly affecting US commerce. It covers industries such as steel, textiles, solar modules, and petrochemicals. For China, the previously reported recommendation was an additional 7.5 per cent tariff. 

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Will India Face Tariffs?

India is one of the 16 economies covered by the US Section 301 investigation. The US is examining India's manufacturing capacity in areas including steel, solar modules, petrochemicals and textiles. However, India's inclusion in the investigation does not mean that new tariffs have already been imposed. The investigation is still ongoing, and final tariff rates have not yet been decided.

India Disputes Excess-Capacity Claim

Earlier, Washington had raised concerns about excess manufacturing capacity in several Indian industries, including solar modules, petrochemicals, steel and textiles. However, Indian trade official Amitabh disputed the argument that India has excess manufacturing capacity in those sectors, stating that India's production should be considered in the context of its large population and domestic demand.

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