As Donald Trump Doubles Steel, Aluminium Tariffs To 50%, Will India Feel The Impact?
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India's direct exports to the US are limited, but rising global oversupply and dumping risks may bring fresh challenges for domestic steel and aluminium producers
US President Donald Trump has doubled tariffs on imported steel and aluminium, and India is watching closely. The sharp hike — from 25 per cent to 50 per cent — takes effect from June 4. While aimed at protecting American industry, this move may indirectly affect Indian steelmakers, who are already dealing with rising imports, falling exports, and increasing competition globally.
In FY25, India's steel imports rose by 9.2 per cent to 10.5 million tonnes, while exports fell 27 per cent to 6.3 million tonnes — making India a net importer for the second year in a row. Global oversupply concerns are now adding to the pressure.
What Exactly Has Trump Announced?
On May 30, speaking at US Steel's Mon Valley Works plant in Pittsburgh, Trump announced that steel tariffs would double. He later confirmed via Truth Social that aluminium tariffs would also rise to 50 per cent, with both hikes taking effect from June 4. Trump framed the move as part of his push to 'secure the steel industry" and described it as a 'BIG jolt of great news" for American metalworkers.
This move is part of Trump's long-standing 'America First" policy, which aims to protect US industries from cheaper imports.
Why The Move Matters Globally — And For India
Since Trump returned to office in January 2025, US steel prices have already risen by 16 per cent. As of March, US domestic steel stood at $984 per metric tonne — far higher than Europe's $690 and China's $392. Although the US produces most of its own steel, it still imports from countries like Canada, Brazil, Mexico, South Korea — and to some extent, India.
Now, as US import barriers go up, global suppliers may redirect their surplus steel and aluminium to other markets, including India. That could create new challenges for Indian producers.
How Much Steel Does India Export To The US?
While Indian officials and industry bodies had earlier suggested that India's steel exports to the US were relatively limited, fresh export data shows the exposure is more substantial than previously perceived.
In FY2025 (April 2024-March 2025), India exported Rs 4,984 crore worth of iron and steel to the US, marking a 26.7 per cent year-on-year increase.
Exports under 'Articles of Iron or Steel' grew to Rs 26,386 crore, up 14.1 per cent year-on-year.
Combined, steel and steel products are now India's sixth largest export category to the US.
Any decline in US demand due to higher tariffs could directly impact India's steel exporters, particularly if American buyers scale back purchases to avoid costlier imports.
The Bigger Concern: Global Dumping Pressures
India's bigger worry isn't just losing some sales to the US, but rather seeing a surge of cheaper steel in its own market. Countries like China, Brazil, and those in Europe — blocked from the US — may try to sell their excess steel elsewhere, including India.
India already imposes anti-dumping duties on some steel imports from countries like China, Vietnam, Korea, and Thailand. But if large volumes are diverted into India, it could strain the domestic market further and put pressure on prices.
India's Steel Industry
Even before Trump's announcement, Indian steel companies were dealing with a tough market:
In FY25, India became a net importer of steel for the second year in a row — imports rose 9.2 per cent to 10.5 million tonnes, while exports fell 27 per cent to 6.3 million tonnes.
State-run SAIL posted an 11 per cent rise in Q4 net profit to Rs 1,251 crore.
Tata Steel's Q4 profits dipped amid higher input costs.
JSW Steel saw better margins aided by cost optimisation.
While domestic demand remains supportive in the short term, rising global volatility, oversupply risks, and pricing pressure remain major concerns for Indian steelmakers.
Aluminium: Hindalco And Novelis
For aluminium, Hindalco Industries may benefit from rising US aluminium premiums but its US subsidiary, Novelis, is already facing margin pressure. Novelis has reported a $40 million quarterly EBITDA hit under the existing 25 per cent tariff. If the higher 50 per cent tariff applies fully, it could further strain Novelis' margins.
The Nippon Steel Deal
The tariff announcement also comes alongside a separate deal involving Japan's Nippon Steel. Trump, who had initially opposed foreign ownership of US Steel, now supports a partial ownership deal where Japanese investment would go ahead, but the US would retain control through a special 'golden share." This would give the American government the power to veto any major decisions, keeping US Steel effectively under American control. The final deal is still awaiting approval.
A Throwback To Trump's 2018 Trade Wars
The latest move closely mirrors Trump's 2018 protectionist push during his first term, which triggered retaliatory measures worldwide. India had then responded with counter-tariffs on selected US imports. While no retaliatory moves have been announced this time, policymakers are watching developments closely.
What Lies Ahead
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What happens next will depend on whether countries like Canada are exempted from these higher US tariffs, and how other major exporters respond. If trade tensions rise, it could lead to cheaper steel and aluminium flooding world markets, which may put fresh pressure on Indian producers already facing falling prices and rising imports.
While India may not feel an immediate major blow, the risks of global oversupply, falling prices, and tougher competition remain very real.
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New Delhi, India, India
First Published:
May 31, 2025, 15:20 IST
News explainers As Donald Trump Doubles Steel, Aluminium Tariffs To 50%, Will India Feel The Impact?
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