NDA govt tells House anti-dumping duty in place to protect domestic industry
US President Donald Trump on Wednesday imposed his first across-the-board 25 per cent tariffs on steel and aluminium, which could increase dumping pressure in the Indian market, already experiencing a surge in steel supply due to Chinese overcapacity.
The US tariffs escalation raises concerns over dumping in India as neighboring China would have 45 per cent effective tariffs on its steel and aluminium products in the US giving it higher incentive to look for other markets. Notably, Trump had announced a 20 per cent across-the-board tariff on Chinese imports prior to Wednesday.
Higher tariffs in the US market traditionally lead to dumping elsewhere, particularly in European and Indian markets, where steel demand currently exceeds domestic production capacity. During Trump’s first term, the EU has imposed restrictions on steel and aluminium fearing trade diversion, hurting Indian exports.
Minister of State in the Ministry of Steel, Bhupathuraju Srinivasa Varma, in response to a parliamentary question on a plan to impose a levy or tariff on imported steel, stated that the government has already introduced a quality control order banning substandard steel.
“Anti-Dumping Duty (ADD) measures on certain steel products—such as seamless tubes, pipes, and hollow profiles of iron, alloy, or non-alloy steel (excluding cast iron and stainless steel) from China PR; electro-galvanised steel from Korea RP, Japan, and Singapore; stainless steel seamless tubes and pipes from China PR; and welded stainless steel pipes and tubes from Vietnam and Thailand—are currently in place,” Varma said in response to a question raised by Congress MPs M.K. Vishnu and Kalyan Kale on Tuesday.
“Countervailing Duty (CVD) is in place for welded stainless steel pipes and tubes from China and Vietnam. Basic Customs Duty (BCD) has been reduced from 2.5 per cent to nil on ferro-nickel and molybdenum ores and concentrates, which are raw materials for the steel industry,” Varma said in the response.
The think tank Global Trade and Research Institute (GTRI) noted that India imports more iron and steel (excluding finished products) and aluminium products from the US than it exports. This means that if India retaliates, the US would face a bigger impact in these sectors.
India has a trade deficit in iron and steel, exporting $494.2 million to the US while importing $842 million. In aluminium and aluminium products, trade is nearly balanced, with exports at $859.8 million and imports slightly higher at $898.9 million.
“Unlike in June 2019, when India responded to similar US tariffs with higher duties on American goods, this time India appears unwilling to take countermeasures, despite the economic impact. Even though both countries have agreed to negotiate, these tariffs indicate that Trump has little regard for India’s concerns. Given this, India should reconsider its engagement in trade negotiations,” GTRI stated.
EU retaliation and global escalation
US blanket tariffs increase the risk of a global trade slowdown, as the European Union—the world’s largest trading bloc—has decided to retaliate against US tariffs. China, the second-largest economy, has already hit back with tariffs targeting US farm products.
“In response to new US tariffs affecting more than Euro18 billion of EU exports, the Commission is putting forward a package of new countermeasures on US exports. These will come into force by mid-April, following consultations with Member States and stakeholders,” the EU announced. It added that the countermeasures could apply to US goods exports worth up to Euro 26 billion, matching the economic scope of the US tariffs.
“In the meantime, the EU remains ready to work with the US administration to find a negotiated solution. The aforementioned measures can be reversed at any time should such a solution be reached,” the EU stated.
Earlier this year, the World Bank warned that across-the-board US tariffs of 10 per cent could reduce already lacklustre global economic growth of 2.7 per cent in 2025 by 0.3 percentage points if America’s trading partners retaliate with tariffs of their own.