The Trump tariff on steel exports to the US would not hurt Indian producers, steel secretary Sandeep Poundrik observed on Monday even as Moody’s Ratings and Indian Steel Alliance cautioned that domestic players would face increased challenges in exporting their products.

The comments from the steel secretary came after US President Donald Trump threatened to impose an additional 25 per cent tariff on all steel and aluminium imports from different countries.

“...the US President has said about putting tariffs on steel. How much steel actually we export to the US? We produced 145 million tonnes of steel last year, of which 95,000 tonnes were exported to the US. So, how does it matter if out of 145 million tonnes, you are not able to export 95,000 tonnes,” the secretary said at an event organised by Bengal Chamber of the Commerce and Industry in Delhi.

India’s steel exports stood at 4.6 million tonnes between April-December of FY25, down 20 per cent year-on-year.

While Indian producers may not feel the pinch of the US tariff directly, it would certainly increase the competitive intensity further in the other markets due to trade diversion caused by additional US tariff.

“The US tariffs on steel will increase competition and exacerbate oversupply at other steel producing markets. Indian steel producers will face increased challenges in exporting their products,” Hui Ting Sim, assistant vice-president of Moody’s Ratings, said.

According to think tank Global Trade Research Initiative (GTRI) data, since the trade war began in 2018, US steel and aluminium imports have continued to rise. Primary steel imports increased to $33 billion in 2024 from $31.1 billion in 2018.

The largest suppliers in 2024 were Canada ($7.7 billion), Brazil ($5 billion), and Mexico ($3.3 billion). Imports from China and India were $550 million and $450 million, respectively.

JSW Steel’s US operations and aluminium producer Novelis, a subsidiary of Hindalco, could be a beneficiary of the Trump tariffs.

Indian steel makers, which have been demanding a safeguard duty on steel imports, expressed ‘deep concerns’ over the proposed tariff.

“The Indian Steel Association expresses deep concern over the US decision to impose tariffs on steel imports. This latest tariff is expected to slash steel exports to the US by 85 per cent, creating a massive surplus that will likely flood India which is one of the few major markets without trade restrictions at present,” ISA president Naveen Jindal said in a statement.