Introduction
Donald Trump’s decision to impose sweeping tariffs on steel and aluminium imports officially took effect on Wednesday. The move increases duties on all such imports to 25%, up from the 10% previously imposed on aluminium. This latest measure aims to reshape global trade and strengthen domestic manufacturing. However, it has sparked concerns over its far-reaching impact on global economies, including India.
Trump Removes Exemptions and Expands Tariffs
The US administration has removed all exemptions from the tariffs first introduced in 2018. Trump has also implemented separate tariffs on Canada, Mexico, and China, with plans to impose similar taxes on imports from the European Union, Brazil, and South Korea, effective April 2.
Economic Justification and Industrial Goals
Speaking at the Business Roundtable, Trump reiterated that these tariffs would encourage foreign companies to invest in US manufacturing. “The higher it goes, the more likely it is they’re going to build,” he stated, emphasizing that the ultimate goal is to bring factory jobs back to the US.
Global Reactions and Economic Impact
The decision has drawn criticism from key global leaders. Australian Prime Minister Anthony Albanese termed the tariffs “entirely unjustified” and against the spirit of the nations’ friendship. The European Union has announced plans to impose counter-tariffs on $28.33 billion worth of US goods in retaliation.
US stock markets have also reacted negatively, with the S&P 500 declining 8% over the past month. While the tariffs may provide a short-term boost to US steel and aluminium producers, economists warn that increased costs could harm industries reliant on these metals.
Effect on India’s Steel Sector
The move has sparked concerns in India’s steel industry, already struggling with rising imports and market saturation. Indian steel manufacturers have witnessed a dip in share prices following Trump’s announcement:
- Steel Authority of India (SAIL) shares dropped by 4.67%
- JSW Steel slipped by 2.20%
- Jindal Steel and Power Ltd fell by 0.72%
According to official data, India exported $450 million worth of primary steel and $820 million worth of aluminium products to the US in 2024. However, with Trump’s latest tariff hike, Indian steel manufacturers fear further losses.
India’s Response to Surging Imports
Amid rising steel imports, India’s Ministry of Commerce and Industry has launched a safeguard duty investigation. The Indian Steel Association (ISA) has urged the government to impose a 25% duty on steel imports, citing a sharp rise in Chinese steel shipments since Trump first imposed tariffs in his previous term.
Major Global Steel Exporters to the US
According to Reuters, the largest exporters of steel to the US include:
- Canada
- Brazil
- Mexico
- South Korea
- Vietnam
Additionally, Canada remains the leading supplier of primary aluminium metal to the US, accounting for 79% of total imports in the first 11 months of 2024.
Conclusion
As the new tariffs take effect, global trade dynamics are expected to shift, with several economies bracing for the impact. While Trump views the move as a step towards bolstering domestic industry, the decision has fueled economic uncertainty and retaliation from key trade partners. As India evaluates its response, the global steel and aluminium sectors remain on high alert for further developments.
