US Tariffs May Change Global Trade Flows, Increase India's Vulnerability to Steel Imports: SAIL Chairman

New Delhi: With the proposed 25 per cent tariffs on all steel and aluminium imports into the US, the imposition of higher levies is expected to change global trade. As fears are mounting in the Indian steel sector, the government is taking possible measures to combat the tariff move and officials are hopeful that India’s exports of steel to the US would not affect much as the commodity's outbound shipment is not in large quantities.

Commenting on the developments, SAIL chairman Amarendu Prakash, on Wednesday said that the imposition of higher tariffs by the US may change the global ‘trade flows’, thereby increasing the chances of India becoming more vulnerable to steel imports. However, the safeguard duty is urgent for the domestic steel industry on the demand to curb cheap imports in the country,” Prakash added.

The Donald Trump administration has proposed a 25 per cent tariff on all steel and aluminium imports into the US and also announced imposing reciprocal tariffs on all its trading partners including India with effect from April 2. Traditionally steel has been exported from Asian countries to the US and Europe. Some steel was being exported to the US from Europe. Once the reciprocal tariffs take effect, such exports would become unviable.

“That will mean Asian countries such as China, South Korea, Japan that are exporting to Europe, that steel becomes free and will be floating around in the world. This floating trade might come to India. So, the tariff will impact India’s exports of steel to the US, and will not affect much as the commodity’s outbound shipment is not in large quantities,” he said.

“That is not a big challenge. The critical steel or critical components, those capabilities do not get developed overnight. So the prices will go up, but the US will continue to import those items, which they do not produce. Setting up a manufacturing unit for those things will take time,” he added.