UPSC Prelims Practice Questions — U.S.’s new 10% tariffs will not affect 45% of exports: Centre

Q1. With reference to the permanent 10% tariff imposed by the U.S. in July 2026 under the Section 301 forced-labour action, consider the following categories of India's exports: 1. Generic pharmaceuticals 2. Steel, aluminium and auto parts 3. Smartphones 4. Knitted and woven garments and made-ups (towels, bedsheets) Which of the above are correctly identified as remaining outside the scope of the new additional 10% duty?

  1. Generic pharmaceuticals
  2. Steel, aluminium and auto parts
  3. Smartphones
  4. Knitted and woven garments and made-ups (towels, bedsheets)
  • A. 1, 2 and 3 only
  • B. 1 and 4 only
  • C. 2, 3 and 4 only
  • D. 1, 2, 3 and 4

Q2. Of the 60 trading partners covered by the U.S. Section 301 forced-labour tariff action of July 2026, how many were placed in the higher 12.5% tariff bracket (rather than the lower 10% bracket in which India was placed)?

  • A. 17
  • B. 34
  • C. 43
  • D. 60

Q3. The baseline 10% 'reciprocal' tariff imposed by the U.S. on nearly all imports in April 2025 (with India initially facing ~26%) drew its primary legal authority from which one of the following?

  • A. The International Emergency Economic Powers Act (IEEPA), via an Executive Order
  • B. Section 232 of the Trade Expansion Act of 1962
  • C. Section 301 of the Trade Act of 1974
  • D. Section 201 of the Trade Act of 1974

Q4. With reference to the U.S. 'reciprocal' tariff measures introduced in April 2025, consider the following statements: 1. A baseline reciprocal rate of 10% was applied to nearly all U.S. trading partners. 2. India initially faced a country-specific additional reciprocal rate of about 26%. 3. The additional 26% rate on India was suspended for a 90-day period after its imposition. 4. The reciprocal tariffs replaced and subsumed all pre-existing Section 232 tariffs on steel and aluminium. Which of the above is/are NOT correct?

  1. A baseline reciprocal rate of 10% was applied to nearly all U.S. trading partners.
  2. India initially faced a country-specific additional reciprocal rate of about 26%.
  3. The additional 26% rate on India was suspended for a 90-day period after its imposition.
  4. The reciprocal tariffs replaced and subsumed all pre-existing Section 232 tariffs on steel and aluminium.
  • A. 1 only
  • B. 2 and 3 only
  • C. 4 only
  • D. 1 and 4 only

Q5. Under Section 232 of the U.S. Trade Expansion Act, the investigation that determines whether imports threaten to impair national security (the basis for the steel and aluminium tariffs) is conducted by which one of the following?

  • A. The U.S. Department of Commerce
  • B. The Office of the U.S. Trade Representative
  • C. The U.S. International Trade Commission
  • D. U.S. Customs and Border Protection

Q6. Which one of the following statements about the legal authority for the U.S. Section 232 tariffs on steel and aluminium is correct?

  • A. It derives from the Trade Expansion Act of 1962 and lets the President adjust imports on national-security grounds following a Commerce Department finding
  • B. It requires the President to impose tariffs on all imports found to have any effect on national security
  • C. It permits restrictive action exclusively against imports of steel and aluminium
  • D. It grants tariff authority that is permanent and cannot be modified once the duties are imposed

Q7. Which one of the following statements about the February 2026 U.S.–India bilateral trade framework is correct?

  • A. It was steered on India's side by the Ministry of Commerce and Industry and widened market access across textiles, leather, gems & jewellery, agriculture, pharma and technology
  • B. It was handled on India's side by the Ministry of External Affairs and covered only pharmaceutical products
  • C. It was led by the Ministry of Finance and eliminated every Section 232 tariff on Indian steel
  • D. It was conducted by the Ministry of Textiles and applied solely to garment exports

Q8. Under the February 2026 U.S.–India interim trade framework, the 'reciprocal' tariff rate the U.S. agreed to apply on Indian-origin goods (pending final conclusion of the agreement) was:

  • A. 10%
  • B. 18%
  • C. 25%
  • D. 26%

Q9. With reference to the composition of India's merchandise exports to the United States, consider the following statements: 1. Smartphones have become one of India's largest single product exports to the U.S. by value. 2. Textiles and apparel shipped to the U.S. represent roughly 28% of India's total textile and apparel exports. 3. Electrical machinery is among India's leading export categories to the U.S. 4. Generic pharmaceuticals exported to the U.S. attract the new 10% forced-labour duty. Which of the statements given above is/are correct?

  1. Smartphones have become one of India's largest single product exports to the U.S. by value.
  2. Textiles and apparel shipped to the U.S. represent roughly 28% of India's total textile and apparel exports.
  3. Electrical machinery is among India's leading export categories to the U.S.
  4. Generic pharmaceuticals exported to the U.S. attract the new 10% forced-labour duty.
  • A. 1 and 2 only
  • B. 1, 2 and 3 only
  • C. 2, 3 and 4 only
  • D. 3 and 4 only

Q10. Which one of the following statements about the scale of India's merchandise trade with the United States, as cited in the 2026 tariff debate, is correct?

  • A. India's total exports to the U.S. stood at about USD 86.35 billion in 2024
  • B. India's total exports to the U.S. stood at about USD 86.35 billion in 2021
  • C. India's total exports to the U.S. stood at about USD 63.35 billion in 2024
  • D. India's total exports to the U.S. stood at about USD 118 billion in 2024

Q11. Under the 2026 Section 301 forced-labour measures, textile tariff-rate quotas (TRQs) — allowing specified volumes of apparel to enter the U.S. duty-free provided U.S.-grown cotton is used — were established (for an initial three-year period) for how many countries, none of which was India?

  • A. Three
  • B. Four
  • C. Five
  • D. Seventeen

Q12. Which one of the following best describes the standing of the Office of the U.S. Trade Representative (USTR) within the U.S. government?

  • A. It is part of the Executive Office of the President and serves as the President's principal adviser, negotiator and spokesperson on international trade
  • B. It is a bureau within the U.S. Department of Commerce responsible for collecting all import duties
  • C. It is an independent, quasi-judicial commission that adjudicates trade disputes like a court
  • D. It is a division of the U.S. State Department that leads all of America's diplomatic negotiations