 "How will Donald Trump’s 25% steel and aluminium tariffs affect India?")
Donald Trump has announced plans to impose a 25 per cent tariff on steel and aluminium imports, according to several media reports.
This comes on top of existing duties on the metal.
Trump also said that countries who impose duties on America would face reciprocal tariffs.
Trump did not specify which countries would face these tariffs.
Trump previously threatened 25 per cent import taxes on all goods from Canada and Mexico, though he paused them for 30 days barely a week ago.
At the same time, he proceeded to add 10 per cent duties on imports from China.
China in response had added tariffs on US exports — which came into effect today.
But what happened? And which countries are likely to be hit?
Let’s take a closer look:
What happened?
Trump has vowed to impose tariff on any steel from abroad.
“Any steel coming into the United States is going to have a 25 per cent tariff,” Trump told reporters on Air Force one, as per The Hindu.
He also promised reciprocal tariffs on other countries.
“And very simply, it’s, if they charge us, we charge them,” Trump was quoted as saying by Al Jazeera. “If they are charging us 130 percent and we’re charging them nothing, it’s not going to stay that way.”
He vowed reciprocal tariffs on countries.
“Very simply, it’s if they charge us, we charge them,” Trump said. “If they are charging us 130 percent and we’re charging them nothing, it’s not going to stay that way.”
He said the tariffs would also cover aluminium too.
Trump said he would hold a news conference on Tuesday or Wednesday to provide detailed information on the reciprocal tariff plan.
He said he wanted to ensure “that we’re treated evenly with other countries.”
Which countries could be hit?
India could be hit.
As per The Times of India, India is the world’s second-largest producer of crude steel.
Though India is not one of the biggest exporters of steel and aluminium to the United States, New Delhi did send Washington around $3 billion worth of steel and aluminium.
Ironically, New Delhi’s imports of finished steel touched a six year high in the first nine months of the financial year starting April 2024.
As per Indian Express, India’s steel imports hit 5.51 million tonnes in April-September period compared to 3.66 million tonnes during the same period last year.
Imports from China touched 1.85 million tonnes over the same period compared to 1.02 million tonnes in April–September 2023–24.
Canada, Brazil and Mexico, followed by South Korea and Vietnam are the US’ largest suppliers of the metals.
Canada, by a massive margin, is the largest supplier of primary aluminium metal to the US.
In the first 11 months of 2024, it comprised 79 per cent of the US’ total imports of aluminium.
As per BBC, Canada sent 6.6 million tonnes of steel across the border in 2024.
Brazil sent 4.5 million tonnes to the US and Mexico sent 3.5 million tonnes of steel to the US.
Mexico is a huge supplier of aluminium scrap and aluminium alloy, as per NDTV.
The US trade-weighted average tariff rate is about 2.2 per cent according to World Trade Organization data compared to 12 per cent for India, 6.7 per cent for Brazil, 5.1 per cent for Vietnam and 2.7 per cent for European Union nations.
Canada has vowed not to back down.
“Canadian steel and aluminum support key industries in the U.S. from defence, shipbuilding and auto,” Canadian Innovation Minister Francois-Philippe Champagne posted on X.
“We will continue to stand up for Canada, our workers, and our industries.”
“Quebec exports 2.9 million tons of aluminium to (the U.S.), that is, 60 per cent of their needs. Do they prefer to get supplies from China?” Francois Legault, premier of Quebec, said on X.
“All this shows that we must begin to renegotiate our free trade agreement with the United States as soon as possible and not wait for the review planned for 2026. We must put an end to this uncertainty.”
BBC quoted Chinese government spokesperson Guo Jiakun as saying, “There are no winners in a trade war or tariff battle. What is harmed are the interests of the people of both countries.”
“What is needed now is not the unilateral imposition of tariffs, but rather dialogue and negotiation”.
What do experts say?
Some are worried about the impact on India.
“Indian steel producers will face increased challenges in exporting their products. Over the past 12 months, high steel imports into India have already dampened prices and earnings of steel producers in India,” Hui Ting Sim, AVP, Moody’s Ratings, was quoted as saying by The Times of India.
They worry that India could become a dumping ground for steel – thus affecting the stability of the steel market.
“The increased trade remedial tariffs on Chinese steel by the US is further going to impact the Indian steel industry adversely with diversion directed to India,” Alok Sahay, secretary general of the Indian Steel Association (ISA), said.
“The surge in imports at predatory prices, due to diversion and due to major reduction in steel consumption in China, is a double whammy for us,” said Sahay.
BBC international business correspondent Theo Leggett told the outlet this is a ‘risky strategy’ for Trump.
Leggett said the Trump administration thinks it can get away with targeting steel and aluminium.
“But it is a risky strategy. Not only would these tariffs be likely to push up prices for a range of products dependent on foreign steel, fuelling inflation, they could also lead to retaliation from other countries – potentially hurting US exporters,” Leggett noted.
Trump’s comments are the latest example of his willingness to threaten, and in some cases to impose, import taxes. Tariffs are coming much earlier in his presidency than during his previous four years in the White House, when he prioritised tax cuts and deregulation.
Trump has alternately said he sees import taxes as tools to force concessions on issues such as immigration, but also as a source of revenue to help close the government’s budget deficit.
Financial markets fell on Friday after Trump first said he would impose the reciprocal tariffs.
Stock prices also dropped after a measure of consumer sentiment declined on Friday, largely because many respondents cited tariffs as a growing worry.
The survey also found that Americans are expecting inflation to tick up in the coming months because of the duties.
With inputs from agencies
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