Since returning to the presidency in January, Donald Trump has wasted no time reviving his hardline protectionist agenda, slapping sweeping tariffs on both allies and rivals in moves that have shaken the global trade order and sent financial markets into turmoil. The US President's most dramatic salvo came last week: a 50% tariff on all steel and aluminium imports, set to take effect from June 4.
The announcement follows a whirlwind legal battle. Last week, a US federal court had ruled that Trump overstepped his authority with an earlier version of the tariffs — seemingly dealing a blow to his trade strategy. But later, an appellate court handed Trump a reprieve, allowing the tariffs to remain in place while the legal fight plays out. Emboldened by the ruling, the Trump administration swiftly escalated its position — not just defending the tariffs but doubling them.
Impact on India
For India, this development couldn’t come at a worse time. The US is a critical market for Indian steel and aluminium, and the doubling of duties threatens to cripple exports worth billions of dollars. With a 50% levy, Indian metal shipments could become instantly uncompetitive, potentially inflicting massive financial losses across the industry and broader trade ties.
In 2024-25, India exported USD 4.56 billion worth of iron, steel, and aluminium products to the US, with key categories, including USD 587.5 million in iron and steel, USD 3.1 billion in articles of iron or steel, and USD 860 million in aluminium and related articles.
"These exports are now exposed to sharply higher US tariffs, threatening the profitability of Indian producers and exporters," GTRI founder Ajay Srivastava said.
India has already issued a formal notice at the World Trade Organization (WTO) signalling its intention to impose retaliatory tariffs on US goods in response to the earlier steel tariffs.
"With Trump now doubling the tariffs, it remains to be seen whether India will carry out the retaliation by increasing tariffs on certain US exports within a month," he said.
A 50% tariff will render Indian suppliers non-competitive compared to the US domestic producers and those with exemptions or trade agreements (like Canada and Mexico under USMCA).
Export volumes will drop, especially in price-sensitive sectors like auto parts, construction materials, industrial goods, and packaging. Several Indian manufacturers, including JSW Steel, Tata Steel, Hindalco, and NALCO, have exposure to the US market either through direct exports or subsidiaries.
With demand drying up, Indian exporters could see annual revenue losses of $1.5–2 billion, depending on how long the tariff lasts and how US buyers respond.
Moreover, Indian suppliers often export intermediate goods to US-based manufacturers. Those contracts are now at risk. Losing supply chain integration could have long-term consequences.
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