Donald Trump's new tariffs spark alarm for Indian steelmakers over China's dominance: Report

In what many are calling Trade War 2.0, Us President Donald Trump signed executive orders expanding tariffs on steel and aluminium imports.

In a fresh round of executive orders, US President Donald Trump expanded the tariffs on both steel and aluminium imports starting Monday. The move is seen as part of Trump’s protectionist stance is likely to have far-reaching impact across the world markets. Experts feel that these new Trump tariffs will particularly impact Indian steelmakers. According to a report by the Hindu Business Line, the development will likely trigger dumping in the markets.

This in turn will force the steelmakers in China to slash the prices. All these factors will impact the steel sector in India as deep discounts may hurt the trade, experts told the Hindu Business Line. Profit margins of prominent steelmakers such as Nippon Steel, JSW Steel and Tata Steel may take a hit.

The report further said that while Canada is still the biggest supplier of steel to the US, China has grown its presence over the years. The report says that China’s steel exports to the US witnessed an uptick by 10.5 percent to $12.48 billion. On the other, Canada remains the top steep exporter to the US at $12.98 billion.

Hindu Business Line quoted Synergy Steels MD Anubhav Kathuria as saying that the new tariffs by the US will lead all major steelmakers from China and other countries to 'divert' their trade to India. This will increase competition amid pressure of domestic prices. Kathuria also said that this will particularly put pressure of small steelmakers.

Meanwhile, Nomura in a note on Tuesday, said that emerging Asian economies such as China, India and Thailand “have higher relative tariff rates (on US exports) and are thus at risk of higher reciprocal tariffs, whereas much of developed Asia (Korea, Singapore) have FTAs with the US and are less at risk.”

On India’s future course of action, Nomura said, “We expect Asian economies to step up their negotiations with Trump. India is considering reducing tariffs on over 30 items and preparing to increase purchases of  US defense and energy. Thailand is also looking to increase imports of US goods, like ethane and agricultural products. If successful, they could strike a deal eventually.”

Indian Steel Association President Naveen Jindal has also reacted to the latest decision by Trump. "Tariffs could lead to massive surplus that will likely flood India." He also said that the Indian Steel Association is "deeply concerned over the US decision."