Donald Trump’s Tariff Increase on Steel and Aluminum to Reach $4.56
The recent announcement by President Donald Trump regarding a significant increase in tariffs on steel and aluminum imports is poised to have a substantial impact on India’s metal exports, valued at $4.56 billion. This change, effective from June 4, is expected to raise costs for Indian manufacturers and exporters, potentially diminishing their competitiveness in the U.S. market. The Global Trade Research Initiative (GTRI) has highlighted the direct consequences of this tariff hike, which could challenge India’s market share in a critical export sector.
Impact on Indian Metal Exports
The impending tariff increase will directly affect India’s metal exports to the United States, which amounted to $4.56 billion in FY2025. This figure includes $587.5 million in iron and steel, $3.1 billion in iron or steel products, and $860 million in aluminum and related items. The GTRI report underscores that the higher tariffs will likely hinder India’s ability to maintain its market share and profitability in the U.S. The U.S. has been a vital market for India’s metal sector, and the new tariffs could disrupt established trade relationships and pricing structures.
The GTRI’s analysis indicates that the increase in tariffs from 25% to 50% will raise product costs for Indian exporters. As a result, Indian manufacturers may struggle to compete with domestic U.S. producers who will benefit from the protectionist measures. This situation could lead to a decline in exports and a potential loss of jobs in the Indian metal industry, which relies heavily on the U.S. market.
Reasons Behind the Tariff Increase
President Trump announced the tariff hike citing national security concerns under Section 232 of the U.S. Trade Expansion Act of 1962. This legislation allows the president to impose trade restrictions if certain imports are deemed a threat to national security. The initial tariffs were set in 2018, with a 25% rate on steel and 10% on aluminum. These rates were revised in February 2025, increasing aluminum tariffs to 25%. The latest increase is expected to drive U.S. steel prices above $1,180 per tonne, which could have ripple effects across various sectors, including automotive, construction, and manufacturing.
The U.S. government’s focus on protecting domestic industries through these tariffs reflects a broader trend of economic nationalism. While the administration argues that these measures are necessary for national security, critics point out that they may lead to higher prices for consumers and businesses reliant on imported metals.
India’s Response and Environmental Concerns
In response to the tariff hike, India has filed a notification with the World Trade Organization (WTO) and is considering additional measures to address the situation. The GTRI report also raises concerns about the environmental implications of the U.S. policy. Steel and aluminum manufacturing are known to be significant carbon emitters globally. While other countries are investing in environmentally friendly production methods, the U.S. approach appears to prioritize economic interests over environmental stewardship.
The GTRI emphasizes that this decision may undermine the U.S.’s commitment to global climate goals and sustainable industrial development. By focusing solely on domestic production, the U.S. risks neglecting the environmental impact of its manufacturing processes, which could have long-term consequences for global efforts to combat climate change.
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