The United States has announced a sharp increase in tariffs on steel and aluminium imports, doubling the existing rates from 25% to 50%. This move, effective June 4, 2025, is expected to significantly impact Indian exporters, particularly those dealing in iron, steel, and aluminium products.
According to the Global Trade Research Initiative (GTRI), India exported $4.56 billion worth of metal products to the US in FY2025, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related goods. With the tariff hike, these exports will now face higher costs, making it challenging for Indian producers to remain competitive in the US market.
The tariff increase falls under Section 232 of the US Trade Expansion Act of 1962, which allows the US President to impose trade restrictions if imports are deemed a national security threat. Former President Donald Trump originally invoked this provision in 2018, setting the 25% tariff on steel and 10% on aluminium, which was later raised to 25% for aluminium in February 2025.
India has already issued a formal notice to the World Trade Organization (WTO), signaling its intention to impose retaliatory tariffs on US goods in response to the earlier steel tariffs. With the latest tariff hike, it remains to be seen whether India will increase tariffs on certain US exports in retaliation.
The move is expected to push US steel prices above $1,180 per tonne, affecting industries such as automobiles, construction, and manufacturing. Additionally, concerns have been raised about the environmental impact, as steel and aluminium production are among the most carbon-intensive industries globally. Critics argue that the US decision prioritizes economic nationalism over environmental responsibility, raising questions about its commitment to global climate goals.
The tariff hike is likely to reshape trade relations between India and the US, with Indian exporters bracing for potential losses and higher costs in the American market.
