The latest escalation was presented by US President Donald Trump himself, who presented plans to impose a 25% tariff on the importation of all steels and aluminium. This may trigger a large extent of falls for India, considering its importance as a major exporter of this metal from America.
Trump revealed the tariff decision while traveling from Florida to New Orleans for the Super Bowl, stating, “Any steel coming into the United States is going to have a 25% tariff.” He added that “aluminium, too” would be subject to similar penalties.
Previous Tariffs and Trade Relations
This is not the first time Trump has moved to impose tariffs. Just a few months after his inauguration, he announced a 25% tariff on steel from Canada and Mexico and a 10% tariff on aluminium from China. As the US’s three largest trading partners, Canada, Mexico, and China have retaliated with their own tariffs on American goods. Trump has also threatened to introduce tariffs on the European Union (EU), accusing the bloc of taking advantage of the US.
Impact on India
India, which exported $4 billion worth of steel and $1.1 billion in aluminium to the US in FY23, is likely to feel the effects of these new tariffs. Trump has previously criticized India as a “tariff abuser,” but no specific tariffs had been imposed on Indian goods until now. The new tariffs may impact India’s steel and aluminium trade with the US, reversing progress made after a 2018 tariff dispute.
In response to the 2018 US tariffs, India imposed additional customs duties on 28 American products in 2019. The two countries took steps to resolve the issue in January 2024 by setting up a joint monitoring mechanism. Under this agreement, the US allowed steel and aluminium imports without extra duties, and India removed retaliatory tariffs on certain US products, such as apples and walnuts.
President Trump’s new tariffs will transform into a setback for all the improvements in US-India trade relations, bringing both countries back to 2018-era trade tensions. The US government is also expected to issue an official statement to clarify the situation.
Trump’s ‘Reciprocal Tariff’ Plans
In addition to the steel and aluminium tariffs, Trump also revealed plans for “reciprocal tariffs,” which could be announced in the coming days. “If they are charging us 130% and we’re charging them nothing, it’s not going to stay that way,” Trump remarked, stressing that the US would impose import duties on products from countries with high tariffs on American goods.
