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India Strikes Back the US with Retaliatory Tariffs on 30 US Goods at a Value of $241 Million

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by - 6/20/2018 1534 Views

Indian Government has announced retaliatory tariffs worth $241 million on 30 US products including almonds, apple and specific motorcycles imported from the US. This tariff is devised to counter US duty hikes on steel & aluminium imports from India.

 

One of the hot topics this year in the metal industry is Donald Trump’s announcement of the intention to impose tariffs on steel and aluminium imports. With this proclamation, the Indian metal industry seems divided for now. A few months ago, a report by news agency Press Trust of India (PTI), quoting industry leaders, said India metal prices would not be impacted much. This report also indicated that the U.S. decision was not compliant with World Trade Organization (WTO) regulations.

But, the former chairman of Steel Authority of India Ltd (SAIL), Sushil Kumar Roongta stated that the move by the US President to impose tariffs on imported steel and aluminium may impact some of India’s steel exports to the U.S. Other countries including the European Union, China and Japan have also criticized President Trump’s announcement on metal tariff.

According to the news agency, Washington's new metal duties will have an impact of about $241 million on the Indian economy.

President Trump justified his decision to impose metal tariffs on the grounds of national security, which makes it difficult for countries to challenge them at the World Trade Organization. Being an ally with the US for decades, the Indian Government repeatedly requested an exemption from these tariffs citing India did not pose a security threat to the U.S. But, all the efforts were in vain.

India’s Retaliatory Tariffs


As a retaliation effort, India has decided to propose $240 million worth of additional tariffs on a variety of imports from the US against tariffs amounting to the same amount on India’s exports of Steel and aluminium to the US. This announcement was made on June 18th, 2018 as a tit for Trump’s Rat-A-Tat tariff volley and occurs alongside retaliatory tariffs on US imports by China, the European Union and the US’ North American Free Trade Agreement partners, Canada and Mexico.

Based on the trade impact resulting from the application of the metal tariff measures by the US, India has reserved its right to suspend substantially equivalent concessions and other obligations further. The proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the United States, based on the measures of the United States.

Additional Tariffs by China and the EU

On June 15th, China retaliated to Trump’s metal tariff by imposing "equal" tariffs on US products worth $50 billion. According to the Chinese commerce ministry, “China definitely does not want a trade war, but in the face of the US's malicious, harmful and short-sighted conduct, China has to impose powerful countermeasures and resolutely defend the national interest and the people's interests.”

In response to the Trump administration’s decision to levy 25% duty on imports of steel and of 10% on imports of aluminium, the EU is right now proposing additional tariffs on US imports worth a modest $4.5 billion.

How Trump’s Tariff Hikes Impact Indian Metal Scrap Prices

Trump’s imposition of the import tariff on primary metals including steel and aluminium will hit India's 10 mt of metal scrap imports which in turn affects current India metal price. India imports about 10 mt of ferrous and non-ferrous metal scrap from across the world of which the US contributes nearly 20%

The proposed metal tariff by the United States has kindled fear among the secondary metal producers in India that they would use metallic scrap as the raw material to prevent the costlier import of finished goods into the country.  

Impact on Indian Steel Prices

With increased demand, the steel industry in India has been on an upswing, and the operational capacity remains steady. Even though India accounts for only 2.4% of total imports to the U.S, the declaration of metal tariff on steel and Aluminium imports from Washington could upset the metal price.

The U.S. is a relatively small market for Indian steel exports, but the trade barriers posed by the Trump’s Government can indirectly affect steel prices worldwide, including in India.

Over the past year, India's exports increased by 40.2% and this highlight the increasing importance of exports to steel manufacturers in the country. Imposition of metal tariff could make Indian steel less attractive to American buyers, which lead to a glut in production, and a corresponding depression in prices.

In 2016 – 2017, India exported iron and steel worth ₹2,211 crore with the U.S which represents only 0.78% of the aggregate trade between the two countries. This percentage rate is relatively low, but at the current level of production, any barrier to global trade can disrupt the steel industry, leading to a fall in global prices. This threatening scenario could lead to a swamp of cheap imports into the Indian market, dampening the mood of domestic producers.

To know more news updates and copper, brass and iron price in India per kg, visit https://www.recycleinme.com/.

Category : Metal

Tags : India metal prices, current India metal price, iron price in India per kg


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I have been with recycleinme.com for the past four years and enjoy working as the Administrator of the Scrap Prices section.  I am graduated as Master of Business Administration in Human resource management. Why I have chosen this course is because I’m very much fond of Business Administrati .... more info

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