Indian steel companies evaluating possible impact of US reciprocal tariffs

Domestic steel players are evaluating the possible impact of reciprocal tariffs imposed by the US administration, saying it is premature to comment on the development.

US President Donald Trump on Wednesday announced reciprocal tariffs on about 60 countries in a historic measure to counter higher duties imposed globally on American products.

For India, the US has announced 26 per cent reciprocal tariffs, contending New Delhi imposes high import duties on American goods, as the Trump administration aims to reduce the country's trade deficit and boost manufacturing.

However, automobiles and auto parts and steel and aluminium articles, already subject to Section 232 tariffs at 25 per cent, announced in March, are not covered in the latest order.

When asked about Tata Steel's reaction, a company official told PTI, "We are evaluating the situation. It would be premature to comment".

"The tariff has come just yesterday. We will study its impact".

A senior official of Naveen Jindal-owned Jindal Steel and Power Ltd (JSPL) said the company is closely monitoring the impacts of the US announcements.

"We are closely examining the US administration's announcement and will share our comments at an appropriate time," he noted.

Meanwhile, various steel industry experts are of view that the US reciprocal tariffs are expected to disrupt global trade flows and affect alternative markets like India with increased steel imports.

"The greater concern lies in the potential trade diversions triggered by such policies. Countries being impacted by the US tariffs may redirect their exports to India, leading to an influx of low-cost imports," ISSDA President Rajamani Krishnamurti said.

According to markets research firm BigMint, in 2024, the imports of finished, semi finished and stainless steel from China to the US were 0.39 million tonnes, 3.06 million tonnes from the EU, 0.75 million tonnes from Japan, 1.19 million tonnes from Vietnam and 2.53 million tonnes from South Korea.

US imports from India stood at 0.22 million tonnes in 2024.

After the imposition of tariffs, these products may be routed to the Indian market, BigMint CEO Dhruv Goel said.

On the steel exports from India to the US, SAIL Chairman Amarendu Prakash has said, "That is not a big challenge. The critical steel or critical components, those capabilities do not get developed overnight. So, the prices will go up, but the US will continue to import those items which they do not produce. Setting up a manufacturing unit for those things will take time".

Industry expert Hridaya Mohan said that with the exports from the EU to the US becoming unviable, India may face steel dumping from China, South Korea, and Japan.