New Trump tariffs may worsen global trade frictions, hit Indian industry

Trump said he would announce reciprocal tariffs this week on countries that tax US imports, with the levies being enacted “almost immediately”

Story by: Kaumudi Kashikar Gurjar

The US plan to slap a 25% tariff on all steel and aluminum imports this week may shore up industries in that country but will worsen global trade frictions and impact the Indian metal industry, analysts said.

Speaking to reporters aboard Air Force One on Sunday, US President Donald Trump said the tariffs would apply to imports of both metals from all countries, including key suppliers Mexico and Canada, though he didn’t specify from when.

Trump said he would announce reciprocal tariffs this week on countries that tax US imports, with the levies being enacted “almost immediately” after announcement.

“If they charge us, we will charge them,” Trump told media persons in an interaction.

If the new tariffs take effect, major steel exporters to the US such as China, South Korea, Japan, and even the European Union will retaliate with countermeasures, Delhi-based policy think tank Global Trade Research Initiative (GTRI) founder and chairman Ajay Srivastava said.

In 2018, during Trump’s earlier tenure as president, the EU imposed retaliatory tariffs on US products, including motorcycles and bourbon whiskey.

Both sides agreed to a temporary ceasefire in 2021, when the US lifted tariffs and rolled out a tariff-rate quotas above which duties are applied. The EU, in turn, removed all curbs.

The suspended EU tariffs on about $3 billion of US goods will be back by the end of March, while the US quotas will end by the end of the year.

In Asia, South Korea, which sells aluminum and steel to the US, are already on the look out for other markets.

China, a long-standing target of US trade actions, could also begin rolling out tariffs on US farm and industrial goods in a move that could further complicate already fragile US-China trade ties, Srivastava said.

“Trump’s tariff strategy is expected to resonate with his voter base, particularly in the manufacturing and steel-producing regions of the country. However, such tariffs could lead to higher costs for American industries that rely on imported metals, potentially triggering inflationary pressures,” Srivastava added.

In March 2018, the Trump 1.0 administration had imposed a 25% tariff on steel and a 10% tariff on aluminum imports under Section 232 of the Trade Expansion Act, citing national security concerns.

Since that trade war began, US steel and aluminum imports have continued to rise, Srivastava said, adding that the US’s primary steel imports rose from $31.1 billion in 2018 to $33 billion in 2024.

The largest suppliers last year were Canada (worth $7.7 billion), Brazil ($5 billion), and Mexico ($3.3 billion). Imports from China and India were $550 million and $450 million, respectively.

Similarly, imports of US steel pipes, tubes, and related products grew from $43.3 billion in 2018 to $52.7 billion in 2024. The biggest suppliers were China ($132 billion), Mexico ($7.3 billion), and Canada ($5.5 billion). Imports from India stood at $2.83 million.

Imports of aluminum and related products increased from $24.2 billion in 2018 to $28.3 billion in 2024. Canada ($11.5 billion), China ($3.1 billion), and Mexico ($1.84 billion) were the top suppliers, while India’s aluminum exports to the US reached $820 million.

“As Trump considers reviving his aggressive trade policies, the world will be watching closely. If history repeats itself, the US steel and aluminum industries may benefit in the short-term, but global trade frictions could intensify, with lasting economic consequences,” Srivastava said.

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