Trump’s 50% Steel Tariff May Not Hit India Directly, but Global Trade Sentiment at Risk

Former US President Donald Trump has announced a sharp hike in import tariffs on steel and aluminium, doubling them to 50% starting June 4 a move aimed at protecting American manufacturers but one that could disrupt global trade flows.

Speaking at a US Steel plant in Pennsylvania, Trump said, “We’re going to bring it from 25% to 50%, the tariffs on steel into the United States of America.” He later confirmed on social media that aluminium imports would face the same increase.

In 2024, the US imported 28 million tonnes of steel and 5.4 million tonnes of aluminium — with Canada being the primary supplier in both categories. India’s share in this is relatively small. Indian steel and aluminium exports to the US are minimal, with Canada and Brazil leading the supply.

That means Indian producers may not feel an immediate blow. Aluminium major Hindalco, for instance, is unlikely to see a direct hit and could even benefit from a rise in US Midwest aluminium premiums. However, since Hindalco sources a significant portion of its raw material from Canada, any lack of exemption for Canadian imports could increase input costs potentially offsetting the pricing gains.

The broader concern, though, is not the direct trade linkage. Instead, it’s the potential chilling effect on global trade sentiment. Economists warn that protectionist measures like these could dampen global growth and weigh on commodity demand, including steel and aluminium.

“Even if India is insulated in the short term, such disruptions tend to create volatility in global prices and investor confidence,” a trade analyst said.

While the tariff hike may play well in US domestic politics, especially among industrial workers, its ripple effects could reach far beyond American borders and that’s where India, and much of the world, will be watching closely.