Trump's 2018 tariffs on Indian steel and aluminium set to stay, even as trade deal deadline nears

Mint

6 hours ago

New Delhi: The proposed India-US bilateral agreement (BTA) is not likely to resolve the fraught issue of American tariffs on Indian steel and aluminium, two people directly involved in the process said, with days to go before the deadline for the first phase of the deal.
The two sides have been racing against time to dust off the deal before president Donald Trump's 9-July deadline for countries to offer lower tariffs on US goods.
The duties—raised earlier this year—are set to remain in force even after the agreement is unveiled, the people cited above told Mint on condition of anonymity.
'As a formal political green signal is awaited from Donald Trump following the approval of the deal's terms by the US Trade Representative, the long-standing duties on Indian metal exports—50% on steel and 50% on aluminium—will not be rolled back in this round of negotiations,' said the first person cited above.
The Indian negotiating team, led by commerce ministry secretary-designate Rajesh Agrawal, returned to New Delhi on Friday after a series of intense discussions in Washington. The team focused on achieving incremental progress in priority areas such as market access for Indian textiles, pharmaceuticals and services, while setting aside contentious issues like metals and autos for future rounds.
According to the second person, the tariffs are part of a broader global regime.
'Every country is facing similar duties that have been levied on steel and aluminium. India has also imposed safeguard duties. These issues were discussed, but there is no interim relief for India on this front,' this person said.
As per this person, both sides may revisit these tariffs in a future round of negotiations.
The Trump administration had originally imposed tariffs of 25% on steel and 10% on aluminium in 2018, citing national security concerns under Section 232 of US trade law. On 12 March 2025, Trump removed all country-specific exemptions and raised the aluminium tariff to 25%. Less than three months later, the US further doubled these tariffs to 50% for both metals, with the revised rates taking effect from 4 June.
Mint reported on 3 June that India would seek the removal of US steel tariffs through trade talks rather than opting for immediate retaliation. It also reported on 5 July that the first tranche of the India-US BTA is now on Trump's desk for final approval, after being greenlit by US Trade Representative Jamieson Greer.
These measures are part of a broader reciprocal tariff hike by the US under Trump's second term, including a 25% tariff on imported automobiles that came into effect on 3 April. The White House order stated that the aim is to "more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminium in the US'.
Trade analysts point out that while India has a limited export exposure to the US in steel and aluminium compared to other sectors, the continuation of high duties reflects Washington's protectionist stance and leaves little room for near-term relief.
'This signals that the US is prioritizing domestic industrial revival and employment over trade concessions, especially in politically sensitive sectors like metals,' said Abhash Kumar, a trade export and assistant professor of economics at Delhi University.
The no-change in tariffs on Indian metals stands in contrast to the deal the Trump administration has struck with the UK. Under their existing bilateral trade framework, metal imports from the UK continue to face a 25% tariff, while both sides work towards a resolution involving quotas and adjusted duties.
Indian industry groups had been hoping that the BTA would offer at least partial relief on these duties, especially since high tariffs erode the price competitiveness of Indian exporters in the US market.
'While metals are not among India's top exports to the US, the principle of reciprocity and fair treatment matters. Our manufacturers are competing against suppliers from countries with more favourable terms,' said Arun Kumar Garodia, former chairman of the Engineering Export Promotion Council (EEPC) and director of Corona Steel, manufacturers of light engineering goods and trading.
Meanwhile, India has challenged the legitimacy of these tariffs at the World Trade Organization (WTO), arguing that they constitute safeguard measures—temporary restrictions allowed under WTO rules to protect domestic industries from import surges. In a notification to the WTO in May, India conveyed its intention to suspend concessions under the Safeguards Agreement in response to the US action.
However, Washington rejected India's position. In a communication circulated to WTO members on 23 May, Washington reiterated that the tariffs were imposed under Section 232 for national security reasons and not as safeguard measures under WTO provisions.
Experts believe that WTO proceedings may not yield quick results. 'India's legal pushback at the WTO is important to maintain multilateral discipline, but realistically, dispute resolution takes time and won't immediately help exporters,' said Ajay Srivastava, a former Indian Trade Service official and co-founder of the Global Trade Research Initiative (GTRI).
Queries sent to the commerce ministry remained unanswered at press time.
As per the GTRI report, in FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the US. This included $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related articles. These products now face sharply higher tariffs, that could make it difficult for Indian exporters to remain competitive.