US President Donald Trump increased the tariffs on steel and aluminium, and the increased 50 percent tariffs would be effective from June 4. The increase in tariffs on steel and aluminium could have a major impact on Indian companies, as India exports about $4.6 billion worth of iron, steel, and aluminium products every year to the US.
Impact on India
The new tariff announcement comes at a time when the two countries are discussing trade. A delegation from the US is expected to come to India this week in order to negotiate a trade deal. The announcement of additional tariffs could hamper the ongoing trade deal talks between the two countries.
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There is uncertainty for Indian exporters as the increased duty on steel and aluminium products would have a significant impact on margins and market competitiveness. The semi-finished steel products, like stainless steel pipe structural components and the engineering steel and iron products, like automotive components, are most exposed to the increased duty.
How can US-India trade deal help
Meanwhile, Indian authorities remain confident in the trade deal with the United States, which could pave the way for avoiding the duties on Indian steel and aluminum products reaching the United States.
“Both countries are committed to work together, both countries desire to give preferential access to each other’s businesses and we are working towards the bilateral trade agreement,” Commerce Minister Piyush Goyal said in a press briefing in his ongoing visit to France. He added that both countries share a good relationship and the issue could be resolved in the bilateral talks.
Special Secretary Aggarwal said that there are only very few areas where the two countries compete. He says that in most areas, the two countries can complement each other. “If we can do a good trade deal, this can actually be a defining partnership in the trade arena,” he added.
Anand Rathi Research on tariff hike
According to Anad Rathi Research, amid the increased tariffs on steel and aluminium, the latter is more vulnerable. Canada, which is the largest supplier of steel and aluminium to the US, is going to bear the largest brunt of the new tariffs.
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