Trump to double steel tariffs from June 4: How India could lose billions

First Post

02-06-2025

Donald Trump's tariff wars continue. He has announced that the US would be doubling tariffs on steel and aluminium imports to 50 per cent, starting June 4. This move could significantly hurt India — it exports steel worth $4.56 billion. Moreover, it could complicate the ongoing trade agreement talks between New Delhi-Washington read more
US President Donald Trump walks as workers react at US Steel Corporation–Irvin Works in West Mifflin, Pennsylvania, US. Reuters
Donald Trump is often referred to as the 'tariff man' and he is certainly living up to that name. He has fired a fresh shot in the global trade war, announcing that he would be doubling US tariffs on steel and aluminium imports to 50 per cent starting June 4.
Addressing a rally at a US steel plant in West Mifflin, Pennsylvania, Trump last Friday said that the sharp hike in tariffs on steel from 25 per cent to 50 per cent will 'even further secure the steel industry in the United States'. 'Nobody's going to get around that,' he said.
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The move has drawn the ire of the European Union whereas Indian exporters have said that this makes the existing trade talks between the two countries 'much more difficult and complicated'.
As we await the tariff to kick in, on Wednesday (June 4), we take a closer look at just how this move will hurt India — and by how much.
Trump's new tariffs on steel and aluminium
Last Friday, US President Donald Trump addressing workers at a US Steel plant in Pennsylvania announced that he would be doubling steel and aluminium import tariffs to 50 per cent , in a move aimed at protecting domestic industries.
'We're going to bring it from 25 per cent to 50 per cent, the tariffs on steel into the United States of America,' said Trump to steel workers, adding, 'Nobody's going to get around that.'
Shortly after, Trump wrote in a Truth Social post that the elevated rate would also apply to aluminium, with the new tariffs 'effective Wednesday, June 4th'.
President Donald Trump speaks at US Steel Corporation's Mon Valley Works-Irvin plant on Friday in West Mifflin. He announced that the US would be doubling tariffs on steel and aluminium tariffs from 25 per cent to 50 per cent. AP
He also wrote in his social media post, 'Our steel and aluminium industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminium workers.'
He then said: 'We don't want America's future to be built with shoddy steel from Shanghai — we want it built with the strength and the pride of Pittsburgh!'
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Since returning to the presidency in January, Trump has imposed sweeping tariffs on allies and adversaries alike in moves that have rocked the world trade order and roiled financial markets. In fact, this increased tax falls on the heels of a similar increase earlier this year, when Trump raised tariffs on aluminium and steel to 25 per cent.
Experts Speak
While Trump and his supporters have lauded the move, saying it would benefit the domestic steel industry, experts aren't so sure. Felix Tintelnot, professor of economics at Duke University, told TIME that these tariffs will be coinciding with struggles in other US industries as a result of the increase.
'So, this is expected to raise the price of aluminium, which is important in inputs for downstream industries like the automotive industry, as well as construction, so there's sort of a distributional conflict here,' Tintelnot warned. 'Yes, it does help the domestic steel sector, but [it's] hurting these other sectors of the economy, and they are already hard hit by other tariffs.'
The US imported around 28 million tonnes of steel in 2024. File image/Reuters
Wayne Winegarden, a senior fellow at the Pacific Research Institute, also agreed with this situation, noting that the tariffs are 'working against themselves" and that consumers can expect prices to increase.
'[Trump is] making it more expensive for domestic auto manufacturers to produce here,' he told TIME. 'It's an economically inconsistent, illiterate policy that seems to be hiding under the national security justifications.'
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Canada , the European Union and other countries, who are the US' top steel partners, have questioned the move, with the EU warning it was 'prepared' to retaliate against the latest tariffs, adding the sudden move ' undermines ongoing efforts to reach a negotiated solution' between the bloc and the United States.
Marty Warren, United Steelworkers national director for Canada, also slammed Trump's tariffs, saying, 'This isn't trade policy — it's a direct attack on Canadian industries and workers. 'Thousands of Canadian jobs are on the line and communities that rely on steel and aluminium are being put at risk. Canada needs to respond immediately and decisively to defend workers.'
Impact on India
Trump's now 50 per cent tariff on steel and aluminium will also have a huge impact on Indian metal exporters, with the Global Trade Research Initiative (GTRI) noting that it will impact Indian metal exports worth $4.56 billion.
Speaking on the issue, GTRI noted that Washington is a huge destination for India's metal exports. In fact, in FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the US. Giving a further breakup, the GTRI said that of the $4.56 billion steel exports, $587.5 million was in iron and steel, $3.1 billion in articles made of iron or steel and $860 million in aluminium related items.
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For India, the consequences of Trump's steel tariff hike are direct, the Global Trade Research Initiative (GTRI) said. Representational image/Reuters
However, with Trump imposing a 50 per cent tariff, these items will become more expensive, making it hard for them to be competitive in the global market.
Others also noted that it brings in uncertainty and fear, which isn't conducive to business. Pankaj Chadha, chairman of the Engineering Export Promotion Council, was quoted as telling The Telegraph, 'The biggest hit will be on engineering exports. How does business operate amid such uncertainties? And this is not a bark, but a bite.'
Moreover, Ajay Sahai, director-general and CEO of the Federation of Indian Export Organisations (Fieo), called the development 'extremely disturbing', warning that both Indian exporters and American importers would suffer significant losses.
But the impact of these tariffs go beyond just the economics of it all. It makes the current negotiations between India and US on the bilateral trade agreement complicated. Pankaj Chadha of (EEPC) India told The Indian Express, 'It's unfortunate that, while bilateral trade agreement (BTA) negotiations are ongoing, such unilateral tariff hikes are being introduced. It only makes the work of negotiators much more difficult and complicated. This will definitely impact engineering exports, which currently stand at around $5 billion under this category.'
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In fact, India issued a formal notice at the World Trade Organization (WTO) signalling its intention to impose retaliatory tariffs on US goods. However, reports state that the US rejected New Delhi's notice, saying its actions were not safeguard measures, which is why it would not hold any discussion with New Delhi on the matter.
And the stock market is already feeling the effects of Trump's steel-aluminium tariffs. Shares of metal firms like JSW Steel, Tata Steel, Jindal Steel, SAIL and others declined on Monday (June 2). And as a result of this, India's Sensex saw an overall drop of 700 points, while the Nifty dropped 200 points.
With inputs from agencies