Will Trump's 50% steel tariff affect India? What to know
What's the story
US President Donald Trump has announced plans to double import tariffs on steel to 50%, starting June 4.
The move, aimed at protecting domestic industries, is unlikely to have a direct impact on India. However, it could potentially affect global trade sentiment and demand.
During a speech at a US Steel plant in Pennsylvania, Trump said, "We're going to bring it from 25% to 50%, the tariffs on steel."
Shortly after, he confirmed aluminium would face the same rate hike.
Export impact
India's steel and aluminum exports to US
In 2024, the US imported some 28 million tons of steel, but net imports were much lower. India contributes only a small fraction of this, with Canada and Brazil being the top suppliers.
The aluminum scenario is similar with Canada, accounting for half of the 5.4 million tons imported by the US last year.
Corporate response
Hindalco may gain from US aluminum premium hike
The tariff hike is not expected to directly impact Indian companies such as Hindalco. In fact, an increase in US Midwest aluminum premiums could benefit the company.
However, since Hindalco sources raw material from Canada, the lack of exemption for Canadian imports could raise input costs and partially offset these gains.
Subsidiary impact
Novelis's potential losses due to tariff hike
Hindalco subsidiary Novelis could be adversely affected by the tariff hike if no exemption is granted.
The company has already warned of a $40 million hit to earnings before interest, tax, depreciation, and amortization (EBITDA) in Q1 FY26 due to the current 25% tariff.
This highlights how global trade policies can have far-reaching effects on multinational corporations and their subsidiaries.