Trump's New Steel Tariffs: A Mixed Bag for Indian Companies in the U.S.

US President Donald Trump’s recent announcement to double steel and aluminum tariffs to 50%, effective June 4, has sparked varied reactions for Indian companies operating in the United States. The policy, aimed at bolstering American manufacturing, presents both challenges and opportunities for Indian firms, particularly those with US-based production units.

India exports about $4.56 billion worth of steel and aluminum each year, and the higher tariffs could make it tougher for these products to compete in the U.S. market. According to the Global Trade Research Initiative (GTRI), Indian manufacturers might see reduced sales and end up with excess stock at home. This has already rattled investors, with shares of major players like JSW Steel, Tata Steel, and SAIL taking a hit as concerns grow about shrinking profits and a potential surplus in India.

• Trump has doubled U.S. steel and aluminum tariffs to 50%, posing export challenges for Indian manufacturers like Tata Steel and SAIL
• Indian firms with U.S. operations, such as JSW Steel USA, stand to benefit by avoiding tariffs and meeting rising domestic demand
• India may face a surge of cheap steel imports from other countries and is seeking tariff relief through Free Trade Agreement talks with the U.S

On the flip side, Indian companies that have set up shop in the U.S., like JSW Steel USA, could come out ahead. By producing steel stateside, they avoid the hefty tariffs, giving them a leg up over foreign competitors. Experts say this could push more Indian firms to invest in U.S.-based factories, especially as steel prices in the U.S. are expected to climb past $1,180 per ton. Industries like car manufacturing and construction will feel the pinch, but companies like JSW Steel USA in Texas might see a surge in demand.

Globally, the ripple effects are worrisome. Fitch Ratings suggests that countries hit hard by these tariffs might flood markets like India with cheap steel, driving down local prices. The Aluminium Association of India is also concerned, as Indian producers already struggling with low-cost imports could face even tougher times.

Also Read: FIEO Raises Concerns Over U.S. Tariff Hikes on Indian Steel and Aluminium Exports

India is looking to soften the blow by pushing for tariff exemptions through ongoing Free Trade Agreement talks with the U.S. While India’s U.S. exports are relatively small, the GTRI advises staying proactive to protect local industries. As global trade patterns shift, Indian companies will need to stay nimble to navigate this new landscape.