Trump hikes steel and aluminum tariffs, raising trade risks for India

President Donald Trump has raised tariffs on steel and aluminum imports, revoking exemptions for major suppliers like Canada, Mexico, and Brazil, a move that could disrupt global steel markets, including India

President Donald Trump significantly increased tariffs on steel and aluminium imports, revoking exemptions and duty-free quotas for key suppliers such as Canada, Mexico, and Brazil and other countries. The move heightens the risk of a multi-front trade conflict.

Trump signed proclamations raising the tariff on aluminium imports from 10% to 25%, reinstating the 25% duty on millions of tons of steel and aluminium that had previously entered the U.S. duty-free under quota agreements and exemptions. These actions extend the 2018 Section 232 national security tariffs, aimed at protecting domestic steel and aluminium producers. A White House official stated that exemptions had weakened the tariffs’ effectiveness.

Additionally, Trump introduced a new North American standard, requiring imported steel to be “melted and poured” and aluminum to be “smelted and cast” in the region. This measure is intended to prevent minimally processed Chinese steel from entering the U.S. market. The order also applies tariffs to downstream steel products made with imported steel.

Trump’s trade adviser, Peter Navarro, emphasized that the tariffs would strengthen U.S. producers and enhance economic and national security. “The steel and aluminium tariffs 2.0 will put an end to foreign dumping, boost domestic production and secure our steel and aluminium industries as the backbone and pillar industries of America’s economic and national security,” he stated.

“This isn’t just about trade. It’s about ensuring that America never has to rely on foreign nations for critical industries like steel and aluminium.”

Meanwhile, global rating agency Moody’s warned that the tariffs could have significant repercussions for Indian steel manufacturers, who are already struggling with low prices and declining earnings due to high steel imports over the past 12 years. Hui Ting Sim, assistant vice president at Moody’s Ratings, noted, “The US tariffs on steel will increase competition and exacerbate oversupply at other steel-producing markets. Indian steel producers will face increased challenges in exporting their products.”

Trump initially mentioned the tariff increase on Sunday and signalled plans to announce additional reciprocal tariffs later in the week. The decision has prompted warnings of retaliatory measures from trade partners.