METAL TRADERS WORRIED OVER US TARIFF BARRIERS

Indian exposure to the American market is low, but fears persist of Chinese steel flooding the domestic market

Indian steel and aluminium industries are apprehensive over the prospect of a global trade war, after US President Donald Trump announced a possible duty hike on both metals being imported into his country. A possible decision is expected this week. The US might impose a 25 per cent duty on steel imports and a 10 per cent duty hike on aluminium shipments. Trump tweeted about it again early on Monday morning.

Indian exposure to the US market is low, at barely 2 per cent of both its steel and aluminium export and import — $330 million and $350 million, respectively.

Government officials, however, said there was a possibility of more Chinese imports flooding India, as they would be barred from the US market.

“Though average price of Chinese steel sold in the US continues to be much higher than in India, the possibility of sudden dips in global prices cannot be ruled out,” said a senior commerce department officer.

A senior functionary of the Indian Steel Association said, “The international price of steel might fall considerably. As a result major exporting countries (China, for one) will be looking to offload their stake.” He added, however, that though global supply outpaces demand now, forecasts show that demand might rise and prices might not fall steeply.

Another Indian export that has come under fire in the US is marine products. US producers complain Indian companies are dumping the produce in the country.

The US is India’s largest export destination, with $42.2 billion shipment sent in 201617. Trump has reminded his constituents of this, arguing cheap Indian products undercut American ones, while lagging in quality.

However, the US is also India’s second largest import destination, with $22.3 billion of merchandise goods reaching our shores last year.

The resulting trade deficit of $19.9 billion is, however, tiny, when compared to some other countries. China, for instance, has a trade surplus of $375 billion with the US, a very large share of the latter’s $810 billion merchandise trade deficit last year.

It is not clear if the Trump administration intends to tax only pure-steel import, of which the US is the largest global importer, or extend higher tariffs to all steel products.

Last month, the US government had issued a report regarding import of steel and aluminium. Apart from reiterating that the US was the largest global steel importer, the report also noted that the country had 169 anti-dumping and countervailing duty orders in place on steel. Of these, 29 are against China. The report suggested two things that will determine the future of Indian export: One was an overall tariff of at least 53 per cent on all steel import from 12 countries, including India. The other was the capping of all steel import from a specific country at 63 per cent of its 2017 export to the US.

WE ARE ON THE LOSING SIDE OF ALMOST ALL TRADE DEALS. OUR FRIENDS AND ENEMIES HAVE TAKEN ADVANTAGE OF THE US. FOR MANY YEARS. OUR STEEL AND ALUMINUM INDUSTRIES ARE DEAD DONALD TRUMP, US President