How Trump’s Tariffs on Steel and Aluminum Could Affect India: Insights from Experts – The Times of India

India’s steel industry is bracing for a challenging time after U.S. President Donald Trump announced the reintroduction of a 25% tariff on steel and aluminum imports. This decision has raised concerns among Indian steel exporters, as many countries, including the EU and China, have criticized the move.

Moody’s, a global rating agency, has highlighted that Indian steel manufacturers are already under pressure from low prices and declining earnings due to high steel imports. Hui Ting Sim from Moody’s noted that these tariffs could lead to more competition and worsen oversupply in the steel market, particularly affecting Indian exporters.

Despite the tensions, data from the Global Trade Research Initiative (GTRI) indicates that U.S. imports of steel and aluminum have been on the rise, with primary steel imports reaching $33 billion in 2024, up from $31.1 billion in 2018. Canada, Brazil, and Mexico are the top suppliers, while imports from India and China are much lower.

Ajay Srivastava, founder of GTRI, believes that Trump’s reintroduction of tariffs may be a tactic for trade negotiations, similar to previous strategies from 2018. This could lead to heightened trade disputes and retaliatory actions from affected countries.

The tariffs could offer a short-term benefit to U.S. steel producers, giving them access to a robust domestic market. Trump is expected to provide more details about reciprocal tariffs that could target imports from countries imposing their own tariffs on U.S. goods.

However, Indian steel secretary Sandeep Poundrik remains optimistic. He pointed out that India produced 145 million tonnes of steel last year, with only 95,000 tonnes exported to the U.S. He emphasized that the Indian steel market is strong and poised for growth, despite the tariff challenges.

Looking back, the situation mirrors events from 2018 when Trump implemented a 25% tariff on steel. In response, India imposed additional duties on 28 U.S. products. After a lengthy tariff dispute, the U.S. lifted tariffs on Indian steel and aluminum in July 2023, signaling a resolution in trade tensions during PM Narendra Modi’s visit to Washington.

Analysts warn that if history repeats itself, the steel and aluminum industries in the U.S. may see short-term gains, but the overall global trade landscape could face increased friction with lasting economic impacts.

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