'Buyer Beware!': Trump Plans Tariffs On Steel Imports In US, Could Harm India Struggling With Declining Steel Exports

At a time when Indian steel exports are witnessing a sharp decline, United States (US) President-elect Donald Trump has signaled potential tariffs on imported steel to protect the American steel industry. Trump also expressed his intent to block Nippon Steel, a Japanese company, from acquiring the Pennsylvania-based US Steel Corporation.

“I am totally against the once great and powerful US Steel being bought by a foreign company, in this case Nippon Steel of Japan. Through a series of tax incentives and tariffs, we will make the US Steel strong and great again, and it will happen FAST! As President, I will block this deal from happening. Buyer beware!!!” Trump announced on Tuesday (3 December).

The announcement comes amidst a challenging period for the Indian steel industry, marked by surging imports and declining exports. Official data reveals that during the first half of FY24-25, steel imports into India rose by 41 per cent, while exports fell by 36 per cent. 

The surge in cheaper imports, particularly from countries with free trade agreements (FTAs), has depressed domestic prices, squeezing the profitability of Indian manufacturers.

On Monday, the Commerce and Industry Ministry, alongside the Steel Ministry, convened with industry stakeholders to address these issues. Following the meeting, the Steel Ministry proposed a 25 per cent safeguard duty on specific steel imports to curb the influx of foreign steel and protect the domestic sector.

Steel Secretary Sandeep Poundrik, speaking at an industry event last month, noted the paradox of growing domestic demand and declining profitability. “Steel consumption in India grew by 13 per cent in the first half of FY24-25. If this trend continues, alongside the government’s infrastructure push, we’ll require a capacity of 300 million tonnes by 2030,” he said.

However, Poundrik highlighted the issue of international dumping, which has led to lower steel prices. Inventory levels for Indian steelmakers have doubled from the typical 15-16 days to around 30 days, further straining profitability.

He suggested increasing basic customs duty or imposing a safeguard duty as potential solutions. However, he cautioned that imports from FTA countries, which account for 62 per cent of total imports, remain duty-free, limiting the effectiveness of higher customs duties.

Rating agency India Ratings recently reported that rising imports are eroding domestic players' profit margins, with the pressure expected to worsen in the latter half of FY24-25. This underscores the urgent need for strategic interventions to stabilize the steel industry and bolster its competitiveness in global markets.

Also Read: Middle East Faces 'Hell To Pay': Trump Issues Ultimatum To Hamas To Release Israeli Hostages Before His Oath As US President