Developing economies such as Sri Lanka, Brazil, Thailand and Vietnam are likely to bear the brunt of additional US tariffs on steel and aluminium more so than India, according to a Moneycontrol analysis.
In 2023, only 14.6 percent of India’s steel and aluminium exports were directed to the United States, while for Brazil, the share was significantly higher at 41.4 percent. Sri Lanka’s dependence was nearly as steep, with 39.5 percent of its metal exports going to the US. Canada and Mexico each had over 80 percent dependence on the American market two years ago.
Countries like Australia and China - despite being major players in global steel markets - were less exposed to the US market, with only 9.9 percent of Australia’s steel and aluminium exports shipped to the US in 2023, and China’s share even lower at 8.6 percent.
The United States imported $113.6 billion worth of steel, iron, and aluminium products in 2023. In absolute terms, the European Union, with 17 percent of its metal exports going to the US, will be hit harder than many other economies. It exported $17.82 billion worth of metal goods to the US last year, slightly more than China, which shipped $17.76 billion. India ranked as the eighth-largest exporter, with total exports valued at $4.2 billion heading to America.
On May 31, US President Trump doubled tariff on imported steel and aluminium to 50 percent, stating that the move is expected to benefit American steel workers, with the new rate kicking from June 4.
“We're going to bring it from 25% to 50% - the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” President Trump had said at a rally in Pennsylvania.
These duties are being introduced at a time when the US is already witnessing a slump in imports. Preliminary data for April shows that industrial supply imports fell 5 percent year-on-year and 25 percent month-on-month compared to March.
India’s Aluminium Export More Exposed than Steel
The impact of the doubling of the US levy on India is expected to be greater for aluminium exports than for steel.
In 2023, India’s steel export dependence on the US stood at 12.9 percent, while its aluminium-related exports had a much higher exposure of 28.3 percent. By comparison, Sri Lanka’s aluminium exports were 67.6 percent dependent on the US, and Canada topped the list with a staggering 93 percent of its aluminium products headed across the border. Brazil’s aluminium export dependence was relatively lower at 18.3 percent.
Out of India’s total $4.2 billion exports in the metals category, nearly two-thirds—$2.8 billion—came from aluminium and related products, making the sector more vulnerable to the new tariff regime.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
