The so-called “Trump Tariffs” have shaken things up for metal traders worldwide. At least three countries in the Asia Pacific region will see significant impacts from U.S. President Donald Trump’s 25% tariff imposition on steel and aluminum.
In addition to increasing the rate to 25% from the previous 10%, President Trump also removed exemptions and special deals that previously allowed certain countries and products to bypass the tariffs. According to a White House official, the new rules will take effect on March 4.
This means millions of tons of steel and aluminum from countries like Canada, Brazil, Mexico, China, Vietnam, South Korea and India, which importers could previously purchase without extra fees, will now face the full tariff. According to Trump, the decision was about making the system clear and straightforward. The duty also applies to downstream products using imported steel.
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Trump Tariffs Come as China Hits U.S. With Duties
Trump’s announcement came just as China’s new tariffs on U.S. goods went into effect last Monday. In response to earlier U.S. trade measures, China imposed tariffs on US $14 billion worth of American exports. This included a 15% tax on coal and liquefied natural gas and a 10% tariff on crude oil and farm equipment, among other things.
In addition to Canada and Mexico, South Korea and Vietnam, as well as Japan and China, also figure in the top 10 steel suppliers to the U.S.
China is likely to see the biggest impact from these new measures by simple virtue of being the world’s largest producer and exporter of steel. According to some experts, the U.S. has China firmly in the crosshairs of Trump’s tariff policy. This leaves little doubt about the likely impact the new tariffs will have on China’s steel and aluminum sectors, as well as international trade.
As they will not be as competitive in the American market after the higher imposed costs, exports to the U.S. by China are bound to be affected, and will probably decline. However, that would lead to more dumping of metals within China itself, which will add to the downward pressure on domestic prices. Already, Chinese producers are suffering from lower profit margins, and a few have shut down entirely.
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China’s Response So Far
To avoid pitfalls in the U.S., China will likely exploit its trade ties with other markets. This would likely mean increasing its exports to a variety of economic zones, such as Southeast Asia and Europe.
China’s response to the metal tariffs has been calibrated so far. After the first round of U.S. duty announcements, China’s response was rated “strong.” It came back with the imposition of a 15% duty on U.S. coal and liquefied natural gas, and a 10% tariff on crude oil, agricultural machinery and large-engine cars.
The country also launched an anti-monopoly investigation into Google and blacklisted several well-known clothing brands. To top it off, Beijing also restricted exports of five rare metals crucial for defense and other critical industries industries.
How the Tariffs Will Impact India
Conversely, the Trump Tariffs may not affect India on the same scale as China. That said, there will likely still be export challenges. The U.S. President previously called out India, saying the country was “a very big abuser” of trade. According to this report, steel firms in India are concerned about losing full access to the U.S. There’s also the fear of downward pressure on domestic metals’ prices, just like in China.
Adding to their concerns is the risk of cheap steel flooding the Indian market. Imports have already been rising due to global trade shifts and protectionist policies, especially since Trump introduced similar tariffs on steel and certain aluminum products during his first term.
To prevent a further surge, India’s Ministry of Steel urged the Union Ministry of Commerce to impose a 25% tariff on steel imports last year. The request came after steel imports from China jumped 80%, reaching 1.61 million tons between January and July 2024.
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India and U.S. Commit to “Mission 500”
Last Monday, ratings agency Moody’s reported that steel producers from India could face challenges exporting their products following the U.S. decision. Meanwhile, reports state that economic think tank GTRI believes the U.S. government’s decision to impose reciprocal tariffs — matching the higher duties set by its trading partners — is unlikely to impact India significantly. The latter noted that differences in the export profiles of both countries would reduce the potential effects of these measures.
After Indian Prime Minister Narendra Modi’s visit to Washington amidst concerns growing over a potential tariff war, India and the U.S. agreed to negotiate a multi-sector trade deal by September-October this year. As part of this effort, both nations announced Mission 500, an initiative aimed at more than doubling bilateral trade to $500 billion by 2030.
Australia May Get Away Tariff Free
President Trump has also agreed to “consider” exempting Australia from the new wave of tariffs on metal imports. The commitment came after a 40-minute conversation with Australian Prime Minister Anthony Albanese early Tuesday morning. Speaking at a press conference shortly after, Albanese emphasized that the two leaders had been very careful when discussing the specific wording of the announcement.
Australia’s trade minister, Don Farrell, later dismissed the Trump administration’s claims that local aluminum producers were “killing” the U.S. market, as there was a trade deficit between both countries.
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