US Tariffs on Steel and Aluminium Imports
The US has imposed a 25% additional tariff on steel and aluminium imports, effective immediately. This decision is expected to significantly affect micro, small, and medium enterprises (MSMEs) in India.
Impact on Indian Exports
- While large producers of carbon steel products might not face a significant impact, the export of stainless steel and industrial-use steel products will be severely hit.
- India exports $5 billion worth of steel and aluminium products to the US, a key market for engineering exporters. Of this, $3 billion worth of steel products (under Chapter 73), mainly exported by MSMEs, will be affected by the tariffs.
- With a voyage time of approximately 60 days to the US, about $1 billion worth of these products are currently en route and will be immediately affected upon arrival.
Domestic Impact and International Response
- According to Steel Secretary Sandeep Poundrik, the tariffs may not significantly impact India's domestic steel industry since less than 100,000 metric tonnes are exported to the US, a small fraction of India's 145 million tonnes production in 2024.
- The European Union (EU) has announced retaliatory tariffs on US farm and industrial goods.
Trade Relations and Strategy
- Ajay Srivastava, from the Global Trade Research Initiative, pointed out that India imports more iron, steel, and aluminium from the US than it exports. Retaliating might impact the US more severely in these sectors.
- There is a suggestion for India to reconsider its trade negotiations with the US, especially since past tariffs were met with higher duties on American goods. However, India seems reluctant to implement countermeasures at this time.