Tariff Threat
Tariffs on metals may backfire on US if India retaliates, says think-tank
This story was originally published at 21:08 IST on 11 February 2025
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NEW DELHI – US President Donald Trump's plan to impose a 25% tariff on the import of steel and aluminium may backfire and hurt the US manufacturers more, if India and other countries retaliate with equal customs duty, according to think-tank, Global Trade Research Initiative. Trump on Monday announced a flat 25% tariff on all imports of the metals.
"If India and other countries impose a 25% tariff on steel and aluminium products from the USA, it would hurt American manufacturing and exports," Global Trade Research Initiative Founder Ajay Srivastava said in a note. "Higher tariffs would make US exports less competitive, benefiting suppliers like China, Japan, South Korea, Vietnam, and Indonesia."
Even though the US has an overall trade deficit with India, it has a significant surplus in iron & steel and aluminium. In 2023-24 (Apr-Mar), India imported iron & steel worth $1.05 billion from the US, compared with exports of the metal worth $475.58 million to the country. Similarly, the import of aluminium from the US was $9.67 billion in FY24, compared with exports of aluminium worth $9.53 billion to the country.
While the Indian government has not yet given any official comments on how it aims to manage Trump's tariff proposal, a top commerce ministry official said "all options are on the table", including "retaliatory measures". New Delhi had retaliated in 2018 after Trump imposed a 25% tariff on steel and 10% on aluminium.
The US President, without specifically naming any country, had also mentioned on Monday that his government would announce a decision later this week on reciprocal tariffs. Notably, a month before taking charge as the president, Trump had said that he intended to impose reciprocal tariffs on India.
Trump's latest tariff threat comes just ahead of Prime Minister Narendra Modi's visit to Washington. Modi is set to meet Trump during his two-day visit to the US starting Wednesday. Indian trade ministry officials expect Trump's stance to soften towards India after the meeting between the two leaders, as Modi may propose a mutually beneficial trade deal to his US counterpart. End
US$1 = INR 86.83
Reported by Krity Ambey
Edited by Saji George Titus
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