Retaliatory tariff
Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
A retaliatory tariff is a tariff (a tax on imports) that one country puts on another country's goods to hit back at that country's tariffs or other trade actions. It is used to punish a trading partner, or to push it to back down. It often targets goods that matter politically in the partner country. A retaliatory tariff can invite counter-retaliation, and this can turn into a trade war.
Example
In 2018 the US put s.232 tariffs on steel and aluminium. In June 2019 India responded by raising duties on 28 US products, including almonds, apples and walnuts. India withdrew these duties in 2023 after the two countries settled the dispute.
Don't confuse with
- Reciprocal tariff: this is set to mirror a partner's barriers, in the same way the US announced its "reciprocal" tariffs in April 2025. A retaliatory tariff is a response to a particular measure by the partner.
- Countervailing duty: this is a legal WTO trade remedy. It cancels out a foreign subsidy, and only after proof of injury to the domestic industry. A retaliatory tariff is a political counter-move.
Related concepts
- Weaponisation of trade
- Economic coercion
- Economic sanctions
- Secondary sanctions
- Export controls
- Dual-use goods
- Technology denial
- Security exception
- Trade war
- Reciprocal tariff