Rama Krishna Sangem
Though Indian government is playing down the impact of 50 per cent tariff on steel and aluminium product by President Donald Trump, trade and industry circles are alarmed over their crippling burden, to a tune of around 5 billion US dollars. Unless India does something urgently to secure a waiver of this huge tariffs, Indian steel exporters and common consumers are bound to face the financial burden. Thousands maybe jobless too.
A few days ago at a rally in Pennsylvania, US President Donald Trump declared, “We’re going to bring it from 25 per cent to 50 per cent, the tariffs on steel into the United States of America. At 25 per cent, they can sort of get over that fence… At 50 per cent, they can no longer get over the fence.”
True to his words, Trump signed a proclamation on Tuesday doubling tariffs on steel and aluminium imports to 50%, a move that could have far-reaching consequences for global trade, including India’s export sector. The decision, which excludes the United Kingdom, took effect on June 4 and is seen as part of Trump’s renewed “America First” trade policy ahead of the upcoming election cycle.
The UK was officially exempted from the tariffs following a meeting in Paris between British Trade Minister Jonathan Reynolds and US Trade Representative Jamieson Greer at the OECD summit.
Export worry for India
India exported around $4.56 billion worth of steel, aluminium, and related products to the US in FY25, according to data from the Global Trade Research Initiative (GTRI). These included:
$587.5 million in iron and steel products, $3.1 billion in articles of iron or steel (up 14.1 per cent year-on-year), $860 million in aluminium and related items Much of this output comes from small and medium-sized manufacturers concentrated in Maharashtra, Gujarat and Tamil Nadu, where job losses may become unavoidable.
Moody’s Ratings, in a note dated February 10, warned that Indian steel producers will face greater difficulty in exporting their products following the tariff hike. “Over the past 12 months, high steel imports into India have already dampened prices and earnings,” said Hui Ting Sim, Assistant Vice President at Moody’s.
Moody’s Ratings, in a note dated February 10, warned that Indian steel producers will face greater difficulty in exporting their products following the tariff hike. “Over the past 12 months, high steel imports into India have already dampened prices and earnings,” said Hui Ting Sim, Assistant Vice President at Moody’s.
“Indian producers are already struggling due to low-cost imports, and the doubled tariffs could worsen their situation,” noted the Aluminium Association of India (AAI).
The Engineering Export Promotion Council of India (EEPC) also warned that the 50% tariffs could pose a serious threat to this key export segment. According to Business Today, EEPC Chairman Pankaj Chadha said, “The proposed hike could jeopardise engineering exports worth around $5 billion.”
