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Context:
U.S. President Donald Trump officially increased tariffs on all steel and aluminum imports to 25% on Wednesday (March 12, 2025), promising that the taxes would help create U.S. factory jobs at a time when his seesawing tariff threats are jolting the stock market and raising fears of an economic slowdown.
Overview of US Tariffs
- Effective Date: Wednesday
- Additional Duty: 25% on steel & aluminium imports
- Mutant Scope of Impact: This time there are no exemptions for any country unlike previous tariffs under Trump’s first term.
Effects on Indian Steel & Aluminium Exports
- Total Exports to US: 5 billion dollars (Steel & Aluminium)
- Exports of Steel Products (Chapter 73): 3 billion dollars (Mainly MSME sector)
- Immediate Effects:
- $1 billion worth of goods in transit crossing higher tariffs 60 days’ voyage to the US.
- A greater impact on Stainless steel & industrial use of steel fasteners.
Government & Industry Response
- Steel Secretary Sandeep Poundrik
- A limited impact of such tariffs on large carbon steel producers since their exports to the US are very minimal.
- Exports of steel to the USA from India are less than 100,000 metric tonnes, that is a very small fraction of the 145 million tonnes produced in 2024.
International & Policy Reactions to the Tariff Imposition
- The response of the EU: Retaliatory tariffs on agricultural and industrial goods from the US.
- India’s Trade Position
- In fact, India imports more raw iron and steel & aluminium from the US than it exports finished goods.
- Such retaliation might hurt the US far more than India.
- Trade Expert Ajay Srivastava: Trade ties with the US need to be reconsidered and countermeasures like those in 2019 could be reinstated.
Important Takeaways
- Limited impact on large Indian steel companies due to very little export of carbon steel.
- MSMEs will face severe impact when it comes to the export of stainless steel & industrial use steel.
- India’s muted response arises several questions over its trade strategy as contrasted to the swift retaliation from the EU.
- Counter tariffs seem likely to affect the USA, raw materials exports to India in turn.