NEW DELHI: Ahead of Prime Minister Narendra Modi’s visit to the US on February 12-13, US President Donald Trump has hinted at imposing a new 25% import duty on steel and aluminium—a move seen as an effort to boost domestic manufacturing. Speaking to reporters on his way to the NFL Super Bowl in New Orleans on Sunday, Trump indicated that such a tariff action was under consideration.
If implemented, it would be a repeat of the March 2018 decision by the then Trump administration, which had imposed a 25% duty on steel and a 10% levy on aluminium. The move could affect key trading partners, including India which exported $3 billion worth of iron, steel, and other steel products to the US in FY24. India’s aluminium shipments to the US were valued at around $1 billion during the same period.
Among the major steel exporters to the US are Canada, Brazil, Mexico, South Korea, and Vietnam. Trump is known to use tariffs as a negotiating tool to secure better trade and investment deals. If the new tariffs kick in, experts warn of retaliatory measures from China, South Korea, Japan, and the European Union.
While the industry is worried about the impact on India, a commerce ministry official said it would be limited if the tariffs are applied uniformly across all countries.
India recently announced a major overhaul in import duties in the Union Budget, a move widely seen as a pre-emptive response to avoid trade tensions with Trump.
Speaking to this paper, Revenue Secretary Tuhin Kanta Pandey highlighted that out of 8,562 tariff lines, 6,500 are below 10%, 7,600 are below 15%, and 8,400 are below 20%. Additionally, 260 tariff lines will now have zero duties. (Tariff lines categorise products for import duty purposes.)
According to an analysis by the Global Trade Research Initiative, many of the goods on which India has reduced import duties would directly benefit US exports. For instance, India cut tariffs on motorcycles with an engine capacity below 1,600cc from 50% to 40%, while for those above 1,600cc, it has been cut from 50% to 30%.
“US motorcycle exports to India stood at $3 million in FY2024, and this tariff cut could expand market access for American manufacturers,” noted the GTRI analysis.
US move worrying, says industry body
The Indian Steel Association on Monday expressed ‘deep concern’ over the US plan to impose tariffs on steel imports. “This is expected to slash steel exports to the US by 85%, creating a massive surplus that will likely flood India,” ISA president Naveen Jindal said