Trump tariffs on steel and aluminium likely to be a double whammy for Indian producers

Donald Trump‘s choice to impose a 25% tariff on metal and aluminium imports is probably going drive up competitors for Indian exporters with producers globally on the lookout for new markets to keep away from the hit from US-duties. Analysts say this may imply Indian exports to international locations akin to South East Asia and Center East will face worth pressures as Chinese language metal could enhance outflow to those markets. The opposite risk is a potential rise in imports of Chinese language metal to India, driving down home costs.“The US tariffs on metal will enhance competitors and exacerbate oversupply at different metal producing markets. Indian steel producers will face elevated challenges in exporting their merchandise. Over the previous 12 months, excessive metal imports into India have already dampened costs and earnings of metal producers in India,” stated Hui Ting Sim, AVP, Moody’s Rankings.

India’s metal imports stood at 6.5 million tonnes (mt) between April and November FY25 whereas exporting 3.2 mt of metal in the identical interval. India’s complete metal manufacturing stood at 142 mt in fiscal 2023-24.

In contrast to earlier situations of nation particular tariffs, Trump has determined to impose the obligation on any metal coming into america.

Based on Ritabrata Ghosh, Vice President & Sector Head-Company Rankings, ICRA limited, the most important metal exporters to the US are Canada, Brazil, Mexico, South Korea, Vietnam and Japan. “These international locations make up virtually 21% of complete metal imports to the US which is at 28-29 mt,” Ghosh stated whereas including these international locations are certain to seek for new markets to keep away from tariffs, impacting each imports and exports of metal from India.

“Metal from Asian markets akin to South Korea, Japan, Vietnam, China, round 6 mt, that was being exported to the US earlier, some a part of it is going to find yourself within the Indian markets,” he stated .The Indian metal exporters are additionally more likely to face intense competitors as metal exports to the US could get diverted to markets akin to Southeast Asia and the Center East.“India can have rather more competitors in its abroad metal markets akin to Southeast Asia and the Center East as China, Japan, and South Korea would attempt to push among the US metal to those markets,” he added.