{"id":49183,"date":"2025-06-01T15:41:31","date_gmt":"2025-06-01T10:11:31","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=49183"},"modified":"2025-06-06T11:26:13","modified_gmt":"2025-06-06T05:56:13","slug":"trump-doubles-steel-tariffs-to-50-implications-for-global-trade-and-indias-exports","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/trump-doubles-steel-tariffs-to-50-implications-for-global-trade-and-indias-exports\/","title":{"rendered":"Trump Doubles Steel Tariffs to 50% &#8211; Implications for Global Trade and India\u2019s Exports"},"content":{"rendered":"<h2>Shift Towards Trade Protectionism Latest News\u00a0<\/h2>\n<ul>\n<li>US President Donald Trump announced a sharp hike in steel import tariffs from\u00a0<strong>25% to 50%<\/strong>\u00a0to further secure and rejuvenate the US steel and aluminium industries. The new tariff is to be enforced from June 4th.<\/li>\n<li>This move was termed \u201c<strong>unfortunate<\/strong>\u201d by India\u2019s exporters, who said this will make trade talks \u201cmuch more difficult and complicated\u201d.<\/li>\n<li>This fresh tariff hike follows a similar increase earlier this year, when Trump raised tariffs on aluminium and steel to 25%.<\/li>\n<\/ul>\n<h2>Key Highlights of the Announcement<\/h2>\n<ul>\n<li><strong>Legal basis:<\/strong>\n<ul>\n<li><strong>The US Trade Expansion Act, 1962<\/strong>, allows the President to impose tariffs if imports threaten national security.<\/li>\n<li>Trump previously invoked this in\u00a0<strong>2018<\/strong>, imposing: 25% tariffs on steel and 10% on aluminium<\/li>\n<\/ul>\n<\/li>\n<li><strong>Purpose:<\/strong>\u00a0Announced at a steel plant rally (West Mifflin, Pennsylvania), Trump justified the move to \u201c<strong>Make America Great Again<\/strong>\u201d, boosting domestic industries.<\/li>\n<\/ul>\n<h2>Reactions from Indian Exporters<\/h2>\n<ul>\n<li><strong>Engineering Export Promotion Council (EEPC):<\/strong>\n<ul>\n<li>The earlier increases already<strong>\u00a0impacted around $5 billion worth of exports\u00a0<\/strong>to the US in the iron and steel segment.<\/li>\n<li>Fears that it will complicate\u00a0<strong>Bilateral Trade Agreement (BTA)<\/strong>\u00a0negotiations.<\/li>\n<li>Requested tariff rate quota (TRQ)\u00a0<strong>exemptions<\/strong>, like those granted to the UK.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Federation of Indian Exporters\u2019 Organisation (FIEO):<\/strong>\n<ul>\n<li>Highlighted negative\u00a0<strong>impact on semi-finished and finished products<\/strong>.<\/li>\n<li>Risk to India\u2019s growing engineering exports, especially: stainless steel pipes, structural steel components, automotive steel parts.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Economic Impact Analysis<\/h2>\n<ul>\n<li><strong>Global price ripple effect:<\/strong>\n<ul>\n<li>The economic impact of these higher tariffs will be significant.\u00a0<\/li>\n<li><strong>US steel prices are already high<\/strong>, at around $984 per metric tonne \u2014 far above European prices at $690 and Chinese prices at $392.<\/li>\n<li><strong>Projected rise:<\/strong>\u00a0To $1,180\/tonne due to the tariff hike, potentially burdening domestic sectors like: automobile, construction, manufacturing.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Indian export vulnerability:\u00a0<\/strong>India\u2019s exports to the US (FY 2025) amounts to total\u00a0<strong>$4.56 billion<\/strong>\u00a0worth of iron, steel, and aluminium products to the US, including &#8211;\u00a0\n<ul>\n<li><strong>Iron and steel:<\/strong>\u00a0$587.5 million<\/li>\n<li><strong>Articles of iron\/steel:<\/strong>\u00a0$3.1 billion<\/li>\n<li><strong>Aluminium and related products:<\/strong>\u00a0$860 million<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Strategic and Diplomatic Implications<\/h2>\n<ul>\n<li><strong>India\u00a0<\/strong>filed a formal notice at the World Trade Organization (<strong>WTO<\/strong>).<\/li>\n<li>Signals intention to\u00a0<strong>retaliate\u00a0<\/strong>with tariffs on US goods.<\/li>\n<li>Response may include\u00a0<strong>increased tariffs on select US exports<\/strong>\u00a0within a month.<\/li>\n<\/ul>\n<h2>Iron and Steel Industry in India<\/h2>\n<p><img decoding=\"async\" src=\"https:\/\/vajiram-prod.s3.ap-south-1.amazonaws.com\/Iron_and_Steel_Industry_in_India_30fdf244a4.webp\" alt=\"Iron and Steel Industry in India\" \/><\/p>\n<ul>\n<li>With the industry accounting for about\u00a0<strong>2% of the nation&#8217;s GDP<\/strong>, India ranks as the world&#8217;s\u00a0<strong>second-largest producer\u00a0<\/strong>of steel, with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY23.<\/li>\n<li>India is\u00a0<strong>poised to overtake China as the world&#8217;s second-largest consumer<\/strong>\u00a0of steel. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last five years.<\/li>\n<li>The steel industry has emerged as a major focus area given the\u00a0<strong>dependence of a diverse range of sectors\u00a0<\/strong>on its output as India works to become a manufacturing powerhouse through policy initiatives like Make in India.\u00a0<\/li>\n<li><strong>The National Steel Policy2017\u00a0<\/strong>envisages 300 million tonnes of production capacity by 2030-31.\u00a0<\/li>\n<li><strong>Huge scope for growth\u00a0<\/strong>is offered by &#8211;\n<ul>\n<li>India&#8217;s comparatively low per capita steel consumption and\u00a0<\/li>\n<li>The expected rise in consumption due to\u00a0<strong>increased infrastructure construction\u00a0<\/strong>and the thriving automobile and railways sectors.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Conclusion<\/h2>\n<ul>\n<li>Trump\u2019s decision to double tariffs on steel imports marks\u00a0<strong>a significant shift towards trade protectionism<\/strong>, with far-reaching consequences for global trade dynamics and India\u2019s export strategy.\u00a0<\/li>\n<li>As negotiations on trade agreements continue,\u00a0<strong>India must navigate the dual challenge<\/strong>\u00a0of protecting its exporters while preserving its strategic bilateral ties with the United States.<\/li>\n<\/ul>\n<h2>Shift Towards Trade Protectionism FAQs<\/h2>\n<p><strong>Q1.<\/strong>\u00a0Under which legal provision did the United States impose tariffs on steel and aluminium citing national security concerns?<\/p>\n<p><strong>Ans.<\/strong>\u00a0The tariffs were imposed under Section 232 of the US Trade Expansion Act, 1962.<\/p>\n<p><strong>Q2.<\/strong>\u00a0How does the recent US steel tariff hike affect India-US trade relations?<\/p>\n<p><strong>Ans.<\/strong>\u00a0The unilateral tariff hike complicates ongoing bilateral trade negotiations and threatens India\u2019s export competitiveness in the US market.<\/p>\n<p><strong>Q3.<\/strong>\u00a0What could be the economic impact of the US steel tariff hike on Indian exporters?<\/p>\n<p><strong>Ans.<\/strong>\u00a0It may reduce the price competitiveness of Indian steel and aluminium products, adversely affecting exports worth over $4.5 billion.<\/p>\n<p><strong>Q4.<\/strong>\u00a0How has India responded to the US\u2019s unilateral steel tariffs at the international level?<\/p>\n<p><strong>Ans.<\/strong>\u00a0India has issued a formal notice at the World Trade Organization (WTO) signaling the possibility of retaliatory tariffs on US goods.<\/p>\n<p><strong>Q5.<\/strong>\u00a0Which sectors in India are likely to be most affected by the US tariff hike on steel?<\/p>\n<p><strong>Ans.<\/strong>\u00a0Sectors such as engineering goods, automotive components, and structural steel products are expected to be most impacted.<\/p>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/www.thehindu.com\/business\/indian-steel-aluminium-exports-to-take-a-hit-with-as-trump-mulls-doubling-tariff-to-50\/article69642563.ece#\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a>\u00a0|\u00a0<a href=\"https:\/\/indianexpress.com\/article\/business\/trump-tells-us-steelworkers-he-will-double-tariffs-on-foreign-steel-to-50-per-cent-10039649\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>US President\u2019s steel tariff hike from 25% to 50% termed \u201cunfortunate\u201d by Indian exporters, saying it will complicate trade talks.<\/p>\n","protected":false},"author":8,"featured_media":49188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,669,22,668],"class_list":{"0":"post-49183","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-shift-towards-trade-protectionism","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-afffairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/49183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=49183"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/49183\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/49188"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=49183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=49183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=49183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}