Moody's Ratings said that Indian steel producers would face increased challenges in exporting their products following the US decision to impose an additional 25 percent tariff on all steel and aluminum imports, as announced by President Donald Trump. Over the past 12 months, high steel imports into India have dampened prices and earnings of steel producers in India, said Hui Ting Sim, assistant vice president at Moody's Ratings.
As per think tank Global Trade Research Initiative (GTRI) data, since the trade war began in 2018, US steel and aluminum imports have continued to rise. Primary steel imports increased to USD 33 billion in 2024 from USD 31.1 billion in 2018.
Canada (USD 7.7 billion), Brazil (USD 5 billion), and Mexico (USD 3.3 billion) were the largest suppliers in 2024. Imports from China and India were USD 550 million and USD 450 million, respectively.
"If Trump follows the same playbook, the return of tariffs on steel and aluminium could be used as leverage in trade negotiations. The 2018 tariffs were widely seen as an aggressive strategy to force trading partners into concessions. The latest move, if implemented, could lead to new trade disputes and retaliatory measures from affected countries," GTRI Founder Ajay Srivastava said.
Moody's expects the tariffs to benefit US steel producers by increasing demand for domestic steel and raising their selling prices.
On Sunday, Trump said he would announce the new tariffs for steel and aluminum imports on Monday. Trump also reaffirmed that he would announce "reciprocal tariffs" - probably Tuesday or Wednesday - meaning that the US would impose import duties on products in cases where another country has levied duties on US goods, said news reports.
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