India’s primary steelmakers may not take a material hit from any across-the-board hike in import tariffs on steel by the US, because the country is not a major export market for them, with less than 3% share in their total shipments. However, they see even greater influx of Chinese steel into India at lower prices, and have intensified their demand for a 25% safeguard duty on imports of the alloy.
Analysts are, however, also seeing the chances of the US import tariffs jacking up its domestic steel prices, and these eventually becoming sort of a benchmark for global prices. Elevated global prices can benefit India’s primary steel companies also, although for user industries and the larger economy, this could have adverse effects with the resultant high imported inflation.
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In 2018, the first Trump government imposed a 25% tariff on steel imports from all countries barring Canada and Mexico. In retaliation to Trump’s tariff war in 2018, India imposed tariffs on 28 US products, including almonds, apples, and walnuts. However, in June 2023, ahead of Prime Minister Narendra Modi’s US visit, both countries agreed to terminate six outstanding disputes at the World Trade Organisation, which included duty rationalisation on steel and aluminium.
Former SAIL CMD Anil Chowdhary said, “President Trump may levy fresh tariffs on steel imports from India and elsewhere to safeguard the interest of the American steel industry. This would come at a difficult time when Indian steel companies face several domestic and international challenges, making India a net importer of steel in the year 2024.”
Ritabrata Ghosh, Vice President and Sector Head, ICRA, said: “Trump 2.0 is expected to bring fresh measures that could slow global trade due to rising protectionism. This is not a positive sign for global growth and, in turn, the health of the global steel industry. Against this backdrop, unless India puts in place trade barriers to protect its domestic steel industry, the Asian steel capacity surplus could chase a few of the remaining high-growth markets like India in the foreseeable future, keeping domestic prices under persistent pressure.”
To be sure, Trump has already ordered a review of the Section 232 steel tariff programmes announced in his first term.
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