The announcement by US President Donald Trump of 25% import duty on steel and aluminium products took effect on Wednesday but the Indian steel secretary said that the industry sees minimal impact of the move on shipments of the alloy to the US.
India exports less than 1 lakh tonnes of steel to the US and the volume is miniscule to have an impact, secretary Sandeep Poundrik told reporters on the sidelines of an event.
While iron and steel exports to the US stood at just $ 399 million in April-December, the exports of products of iron and steel were $ 2.2 billion. The exports of aluminium to the US were $ 599 million in April-December.
The US announcement raises duty on aluminium and its articles to 25% from 10%. In steel the US has maintained duties at 25% since 2018 but after negotiations had exempted some countries – including India – from these higher duties.
As the duties will be applicable on all countries, some of them have announced their intent to retaliate. The European Union (EU) has said it will impose retaliatory measures on $ 28.3 billion worth of US products like boats, motorbikes and bourbon. China and Canada have alo announced action. The UK, however, said it will push for a trade deal with the US.
“India imports more iron and steel (excluding finished products) and aluminium products from the US than it exports, meaning that if India retaliates, the US would face a bigger impact in these sectors,” wrote trade analyst firm GTRI. India has a trade deficit in iron and steel, exporting $494.2 million to the US while importing $842 million. In aluminium and aluminium products, trade is nearly balanced, with exports at $859.8 million and imports slightly higher at $898.9 million.
When the first Trump administration increased duties on steel and aluminium, India imposed retaliatory tariffs on 28 products imported from the US in 2019.
“Unlike in June 2019, when India responded to similar US tariffs with higher duties on American goods, this time, India seems unwilling to take countermeasures, despite the economic impact. Even though both countries have agreed to negotiate, these tariffs show that Trump has little regard for India’s concerns.” wrote GTRI.
The measures by India and the US were challenged by the opposite parties at the World Trade Organisation (WTO). The challenge to steel and aluminium duties also came from other countries and these were later settled bilaterally by the US. Settlement with India in 2023 when India and the US agreed to settle six disputes at the WTO.
For exporting to the US without paying additional duties the companies need to seek an exemption. Around 70% of steel exports and 80% of aluminium exports from India to US were supposed to have got exemption from the additional duties.
In return India has assured the US that it would remove retaliatory tariffs it had imposed on eight items including almonds, apples, chickpeas, lentils, walnuts, boric acid and diagnostic reagents. India had imposed 20% additional duties on apples, walnuts and lentils.