Last Updated on February 11, 2025 by Misha Bhatia
India braces for economic impact as the US imposes 25% tariffs on steel and aluminium imports
February 11, 2025: New Delhi:
The Indian stock market witnessed a sharp crash, with the Sensex plunging 1,038 points (1.25%) and the Nifty dropping over 327 points (1.3%) following US President Donald Trump’s decision to impose 25% tariffs on steel and aluminium imports.
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Trump’s Tariff Hike: A Global Economic Ripple Effect
The new tariffs, set to take effect on March 4, increase aluminium duties from 10% to 25% and apply to all steel and aluminium imports, including those from Canada, Brazil, and India. While India is not a major steel supplier to the US, it remains one of the largest global producers of aluminium, making this tariff a potential disruptor for the Indian metals industry.
Sensex Crash and Investor Concerns
The stock market downturn reflects investor fears over how these tariffs might impact Indian businesses. Vedanta and Hindalco—two of India’s biggest aluminium producers—are expected to face short-term export declines as they seek alternative markets.
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Meanwhile, the European Union and Canada have issued strong warnings, with Canadian steelmakers predicting “massive disruptions” and the European Commission vowing to protect EU businesses from the economic fallout.
Modi-Trump Meeting Amid Trade Tensions
The tariff announcement comes just two days before Indian Prime Minister Narendra Modi’s scheduled visit to the US. Modi had previously stated that the meeting would focus on strengthening US-India trade relations and “further deepening our partnership.” However, the new tariffs could strain discussions.
Adding to diplomatic tensions, the US recently deported 104 Indian immigrants living illegally, sparking political debate in India.
Trump’s Trade War: India in the Crosshairs
Trump has repeatedly criticized India on trade issues, calling it a “big abuser” and highlighting India’s high import tariffs. Despite India’s recent custom duty cuts on US products like Harley-Davidson motorcycles and Apple components, Trump remains adamant about tougher trade policies.
Economic Consequences and Global Market Reactions
During his first presidency (2017-2021), Trump’s tariffs initially boosted US manufacturing jobs, but by 2019, they led to factory slowdowns and job losses. Experts fear history may repeat itself with the new tariffs on China, Canada, and Mexico.
China has already retaliated with counter-tariffs on American coal and liquified natural gas, escalating global trade tensions. Meanwhile, Trump has also threatened Colombia with tariffs over immigration disputes and imposed new levies on Canadian and Mexican imports, though these have been temporarily paused.
With Trump doubling down on protectionist trade policies, economic analysts predict a volatile period for global markets, especially for India’s metal, manufacturing, and export sectors.
Tags:
Trump tariffs, US-India trade, Sensex crash, global trade war, aluminium imports, steel tariffs, Modi-Trump meeting, stock market crash, Trump economy, Indian exports, China-US trade war
