Trump’s 50% steel tariff puts US$ 4.56 billion Indian exports at risk

Former U.S. President Donald Trump has announced a sharp increase in tariffs on steel and aluminium imports from 25% to 50%, effective June 4, 2025. Framing the move as a step to protect American industry, Trump also approved a revised deal allowing Japan’s Nippon Steel to invest in US Steel.

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In a major policy announcement on May 30, former U.S. President Donald Trump stated that steel and aluminium tariffs would be doubled from 25% to 50%, effective June 4, 2025. Speaking at US Steel’s Mon Valley Works–Irvin Plant in Pennsylvania, he positioned the move as a decisive measure to further secure the U.S. steel industry and protect American workers. The announcement, made in front of steelworkers and supporters, is part of his broader campaign to boost domestic manufacturing and reduce foreign influence over strategic industries.

Trump mentioned that he had initially considered setting the tariffs at 40%, but industry leaders had advised increasing them to 50% in order to create a stronger barrier against imports. He remarked that a 25% tariff was something companies could manage to work around, but at 50%, it would be much more difficult for them to bypass.

The announcement also coincided with Trump’s endorsement of a controversial deal allowing Japan’s Nippon Steel to invest in US Steel. Initially a vocal opponent of foreign ownership in strategic sectors, Trump reversed his stance after what he called lengthy negotiations that led to improved terms, including a “golden share” for the U.S. government—ensuring some oversight on the company’s operations.

“US Steel was being sold into foreign hands with no protections for our great steel workers,” Trump said. “And I said there’s no way we’re gonna let that happen. I was watching over you.” He added, “Every time they came in, the deal got better and better and better for the workers.”

While the move has been welcomed by some American steelworkers, economists and global trade analysts have raised concerns about the broader economic impact. According to the Global Trade Research Initiative (GTRI), the revised tariffs could significantly hurt major trading partners, including India, which exported US$ 4.56 billion worth of iron, steel, and aluminium products to the U.S. in FY2025. This includes US$ 587.5 million in iron and steel, US$ 3.1 billion in articles of iron or steel, and US$ 860 million in aluminium and related articles.

“For India, the consequences are direct,” the GTRI warned. The increased duties will make Indian metal products less competitive in the U.S. market, potentially leading to a decline in export volumes, job losses in the sector, and economic strain for producers.

Moreover, the tariffs were invoked under Section 232 of the U.S. Trade Expansion Act of 1962, which allows the president to impose trade restrictions if imports are deemed a threat to national security. Trump first used this clause in 2018 to impose a 25% tariff on steel and a 10% tariff on aluminium, triggering immediate retaliation from allies like Canada and complaints from domestic manufacturers. While the EU later removed its retaliatory tariffs, the issue remains contentious.

The GTRI also highlighted the likely rise in domestic steel prices, estimating they could exceed US$ 1,180 per tonne. This would impact downstream industries such as construction, automobiles, and manufacturing, raising input costs and potentially inflation. In February 2025, the aluminium tariff had already been increased to 25%, compounding the issue for import-dependent sectors.

Environmental experts are also raising red flags. Steel and aluminium are some of the most carbon-intensive industries, and the U.S. move, unlike those in Europe and elsewhere, does not come with any green transition conditions. The GTRI noted that while other countries are investing in greener production methods, the U.S. decision “lacks any climate conditions,” reflecting a policy shift toward economic nationalism at the cost of global sustainability goals.

India has responded by filing a notice at the World Trade Organization and is expected to take further action. As global trade partners brace for the ripple effects of the U.S. move, Trump’s policy marks a defining moment in the ongoing debate between protectionism and free trade—one that will likely reverberate well beyond American factory floors.