India may escape impact of US steel tariff hike, but global fallout looms
In a move aimed at shielding American manufacturers, US President Donald Trump has announced that tariffs on imported steel and aluminium will double to 50 per cent, beginning June 4. The announcement came during a speech at a US Steel plant in Pennsylvania, where Trump declared, "We're going to bring it from 25 per cent to 50 per cent, the tariffs on steel to the US." He later confirmed via social media that aluminium would face a similar hike.advertisementTrump's protectionist push underscored his commitment to reviving American industry. However, while the direct trade exposure of countries like India remains limited, economists and analysts are sounding alarms over the broader global implications.India, however, has moved to retaliate against the US metal tariffs by filing a notice at the World Trade Organisation even as the two countries work to finalise a broader trade deal.LIMITED DIRECT IMPACT ON INDIA'S METAL EXPORTS
For India, the immediate economic fallout from Trump's steel tariffs announcement appears relatively muted. In 2024, the US imported approximately 28 million tonnes of steel, though net imports were significantly lower due to domestic production.Indian exports account for only a small fraction of these volumes, with Canada and Brazil leading the list of US suppliers.Similarly, US aluminium imports, estimated at 5.4 million tonnes last year, were heavily concentrated from Canada, which supplied around 50 per cent. India's share remains marginal.advertisementYet, the tariff hike could alter supply chains globally, with potential spillover effects that reach beyond direct trade numbers.POTENTIAL UPSIDE AND RISKS FOR INDIAN COMPANIESLarge Indian metal producers like Hindalco may not see immediate damage. In fact, rising US Midwest aluminium premiums could offer some benefit to the company. However, the situation is nuanced.Hindalco sources some of its aluminium raw material from Canada, and if Canadian imports do not receive exemptions, input costs could rise, cutting into profit margins.More concerning is the impact on Hindalco's US-based subsidiary, Novelis, which could see a significant earnings hit. Novelis has already projected a USD 40 million reduction in quarterly EBITDA (earnings before interest, taxes, depreciation and amortisation) starting FY26 due to the existing 25 per cent tariff. With the new rate doubling to 50 per cent, losses could widen unless exemptions or policy adjustments follow.RIPPLE EFFECTS: A GLOBAL TRADE SHAKE-UPEven if India avoids direct commercial harm, the indirect consequences are hard to ignore. Analysts warn that global trade sentiment could weaken, and protectionist moves may dampen overall economic momentum.For major metal exporters like the European Union, China and Brazil - now facing higher barriers to the US market - alternative markets such as India could become dumping grounds.advertisementIndia is already battling with global steel overcapacity and has imposed anti-dumping duties on products from China, Vietnam, South Korea and Thailand. However, a fresh wave of cheap imports could further strain domestic prices and compress producer margins.GLOBAL SENTIMENT MAY WEIGH HEAVIER THAN TRADE DATAWhile India may avoid immediate disruption, the broader consequences of Trump's tariff hike extend well beyond simple trade math.As global suppliers seek new buyers and protectionist trends deepen, India could find itself grappling with downward pressure on commodity prices, rising input costs and renewed trade friction - factors that bear close watching in the months ahead.Must Watch
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Mint
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Time of India
39 minutes ago
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Time of India
39 minutes ago
- Time of India
Most listed new-age startups improve Q4 profitability; Swiggy, Ola lag behind
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'Volume trends have been impacted by increased competitive intensity and several quality issues faced by customers,' the analysts added. The company's operating revenue for the March quarter came in at Rs 611 crore – lower than its rival Ather Energy, which posted Rs 676 crore in top line . To be sure, Ather Energy, which went public in May, clocked less than half the scooter volumes compared with la Electric in fiscal 2025. Even though Ola Electric's losses expanded, Ather Energy saw its loss narrowing 17% during the March quarter. Logistics on firm ground New-age logistics firm Delhivery and truck aggregator platform BlackBuck both reported profits for the fourth quarter, compared to losses in the year-ago period. For Delhivery, the profitability in the March quarter meant it posted its first full year of net profit as its core transportation business continued to show improvement in operating efficiencies. 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