Trump’s 50 Percent Tariff on Steel and Aluminium Could Impact India’s Engineering Goods Exports

Image Source : Firstpost

The Engineering Export Promotion Council of India has raised concerns over the potential impact of the United States’ decision to impose a 50 percent tariff on foreign steel and aluminium imports. The move, announced by President Donald Trump, is expected to affect nearly a quarter of India’s engineering goods exports to the US, which currently stand at approximately 5 billion dollars annually.

Key Developments in the Tariff Decision
- The tariff increase will take effect from June 4, 2025, doubling the previous 25 percent duty imposed on steel and aluminium imports
- Indian exporters of steel and aluminium products may face higher costs, leading to a likely decline in shipments
- The UK recently secured exemptions from the 25 percent tariff through trade negotiations, prompting calls for India to seek similar waivers
- The tariff hike comes at a time when India and the US are engaged in bilateral trade agreement discussions, adding complexity to negotiations

Strategic Implications for India’s Engineering Exports
- The increased tariff could make Indian engineering goods less competitive in the US market
- Exporters may need to explore alternative markets or adjust pricing strategies to mitigate losses
- The tariff hike is expected to intensify global competition, affecting trade flows and pricing dynamics
- Industry leaders have urged the Indian government to negotiate exemptions to safeguard exports

Market Adjustments & Strategies
- Analysts predict that the tariff increase will reshape trade patterns, influencing supply chains and pricing strategies
- Indian exporters may need to diversify their markets to reduce dependency on US trade
- The government’s response to the tariff decision will be crucial in determining the future of India’s engineering exports

Source : EEPC India, Economic Times, Firstpost.