Trump's 2018 tariffs on Indian steel and aluminium set to stay, even as trade deal deadline nears
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.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
44 minutes ago
- Economic Times
Private investments flat, but pickup in demand seen: CII Chief Rajiv Memani
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads New Delhi: Private investment stayed flat in the last three-six months as companies are finding it challenging to envisage manufacturing amid an uncertain tariff structure, though it is currently seeing a revival in line with an improvement in the demand environment , said Rajiv Memani, president, Confederation of Indian Industry (CII)."I won't say it has gone down, but it is kind of flat in the last three to six months. But we can see an acceleration happening as the demand environment picks up especially with the interest rate reduction," Memani told ET, adding that land and environment approvals should also be firms announced new projects worth ₹3.5 lakh crore in the quarter ended June, sharply rising from ₹1.4 lakh crore a year earlier, according to the Centre for Monitoring Indian Economy. However, it was the lowest level of private investments in four quarters. On urban consumption, Memani said there is some slowdown, especially in the lower-to-middle-income noted that India previously used to take a long time for inking free trade agreements (FTA) with the West. That scenario has changed, with all nations including India presently evaluating trade pacts with trusted partners."I think it's a positive change, but it is a big change. We are signing up with large countries where we have complementarity of with countries we are competing with," said Memani, adding such pacts also create a bigger market opportunity besides generating interest from micro, small and medium issues that India should be wary of while negotiating FTAs with developed countries, he said, "You have to be trusting and verifying go in step by step rather than trying to boil the ocean in one go."Insisting that India has to create efficiency by unleashing further reforms on land, logistics, energy, and labour productivity, even at the state level, he also called for more investments in R&D. "We need to act with more speed and look at either reforms and allocations towards R&D and also some of the production linked incentive (PLI) schemes or schemes like PLI which require some initial support," Memani how the industry is preparing to deal with shocks such as China suspending rare earth exports, he said companies are reducing their financial risks, taking lesser debt, and relying more on industry chamber is assessing the extent of India's reliance on global supply chains. Citing the instance of compressors, Memani said the critical parts are imported and that CII is engaging with the government on ways to address the issue and areas where PLI support is has recently recalled its engineers and technicians from the Indian factories of Taiwanese contract manufacturing giant Foxconn and Memani said the Centre has been cautioning the local industry that such things can happen, urging it to be prepared. The government, he noted, has been proactive and offered PLI said CII's suggestions on goods and services tax (GST) reforms include rate rationalisation and slab structuring, subsuming all taxes in the overarching framework and input tax credit which impact industry competitiveness. "I think it's very important that we find ways and means to bolster the income and resilience of the bottom 30%," Memani reform pertains to assessment audit processes wherein states have their own separate audits with each raising different issues and asking different sets of information. "What we have recommended is that there should be a standard operating procedure. Secondly, can we just do the audit once at least for the MSMEs. So these are newer issues that are coming up," he said. The last GST reform is technology-linked where for smaller companies, CII has recommended lesser compliances."Within some sectors, there are areas where we have dependencies in industry is trying to see how the gross value add can improve. So if you look at electronics, how can you bring it up to late 20% or early 30% in the next five-six years," Memani said, pointing to disabilities in certain sectors. The CII has set up an AI Centre of Excellence to help companies become more efficient. "We are seeing early signs in some industries-information technology and financial services. I think there is a clear need that India should be the AI capital of the world," said Memani.
Time of India
an hour ago
- Time of India
Dalai Lama's reincarnation our internal affair, says China
Dalai Lama NEW DELHI: The recent tensions over the Dalai Lama 's announcement that China will have no role in his reincarnation seemed set to intensify with the Chinese ambassador to India, Xu Feihong, rejecting his statement and also the support expressed by Union minister Kiren Rijiju for the Tibetan spiritual leader 's decision. While Rijiju had clarified that he had spoken in his personal capacity as a devotee, Xu said in a post Sunday that "no interference by any external forces will be allowed". The Indian govt had said in response that India takes no position on issues of faith and religion. "It has been noted that some Indian official recently made some remarks regarding the reincarnation of the Dalai Lama," said Xu on X. "Chinese govt opposes any attempts by overseas organisations or individuals to interfere in or dictate the reincarnation process. Xizang (Tibet) is an inalienable part of China's territory." Xu said the Dalai Lama will have no role in his reincarnation. "The conferment of their religious status and titles is the prerogative of the central govt of China. The reincarnation and succession of the Dalai Lama is inherently an internal affair of China."
Deccan Herald
an hour ago
- Deccan Herald
RSS discusses religious conversions, demographic 'imbalances' during 3-day meet
The meeting raised concerns over certain digital contents adversely impacting the Indian family structures and societal norms, and discussed ways to address the issue, sources said.
