Higher steel tariffs to dent exports as companies look at other markets
Representative image (Picture credit: AP)
NEW DELHI: Doubling of import duty on steel and aluminium by the Trump administration will dent export demand, with companies having to scout for alternative markets.
Several US importers have gone slow on fresh orders as costs went up significantly after the imposition of 25 per cent duty, although India was not seen to be worse off, given that the same duty applies to all countries.
But if Trump decides to move ahead with his threat, several American firms will have to slow down production as such duties are seen to be unviable and unsustainable. This will also reduce demand for inputs.
"The economic impact will be significant. US steel prices are already high, at around $984 per metric tonne - far above European prices at $690 and Chinese prices at $392. The doubling of tariffs is expected to push US prices to about $1,180, squeezing US domestic industries such as automotive, construction, and manufacturing that depend on steel and aluminium as key inputs.
These sectors may face hundreds of dollars in additional material costs per tonne, driving up prices, reducing competitiveness, and risking job losses or inflationary pressures," said trade research body GTRI.
Fieo chief S C Ralhan said the increase in tariffs would have a significant bearing on India's steel exports, especially in semi-finished and finished categories like stainless steel pipes, structural steel components, and automotive steel parts.
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These products are part of India's growing engineering exports, and higher duties could erode our price competitiveness in the US market.
EEPC India president Pankaj Chadha said, "It's unfortunate that while bilateral trade talks are going on between India and the US, such unilateral tariff increases have be done. It only makes the work of negotiators more complicated."
Last fiscal, India exported steel and finished products of $6.2 billion to the US and about $0.9 billion of aluminium and its products. The US is among the top destinations for Indian exporters, who have been increasing market share through high-quality production and competitive pricing, Fieo said.
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