How will Indian steel industry be impacted if the US imposes a 25% tariff on steel and aluminium products coming from any country, as threatened by President Donald Trump?
Will it help India as it may exploit the situation and dump its products into the US, filling the void created by China?
Will it be a double whammy on India, as Beijing may dump its wares into India?
Will the world’s second-biggest producer of crude steel suffer?
If media reports are to be believed, the 25% tariff on steel and aluminium products will be applicable to everybody, including India. It will not be limited to China, Canada and Mexico.
According to the data revealed by the US Trade Department, America imports about half of its total steel requirement. Canada is the biggest exporter, it sold about 3.2 million tons of steel to the country in FY 2023-24.
Roughly half of all aluminum used in the U.S. is imported, The vast majority comes from neighbour Canada. At 6.39 million tons, Canada emerged as the biggest exporter in FY 2023-24. It was followed by Brazil (3.49 million metric tons), Mexico: (2.85 million metric tons, China (2.22,872 million tons), South Korea, (1.53 million metric tons) and Germany (1.18 million metric tons.
Indian steel exports to the US are comparatively low. India produced 145 million tonnes of steel in FY 2023-24, of which 95,000 tonnes were exported to the U.S., a minuscule part of the steel, imported by the U.S.
Donald Trump imposed a tariff of 25% on steel imports from China in 2018 during the first term of his presidency.
India is the second largest producer of crude steel, however, its overall finished steel imports hit a six-year high at 3.7 million metric tonnes last year.
According to the Indian Steel Association (ISA), driven by weak steel demand and overcapacity in China, the steel producers in that country may dump their products into India at cheaper rates.
Thus, first India may lose a considerable part of its steel exports to the US due to increased tariffs imposed on it. Secondly, China may dump its own wared in India.
Confirming it, Alok Sahay, Secretary General of the Indian Steel Association (ISA), told journalists,”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.”
Reacting to the US announcement, French Foreign Minister, Jean-Noel Barrot, warned that the European Union would impose retaliatory tariffs on the US products. He said, “There is no hesitation when it comes to defending our interests.”
If media reports are to be believed, Prime Minister Narendra Modi is most likely to discuss the issue of tariffs on Indian goods when he meets President Donald Trump.
