Despite India’s complaints against Trump’s 25% aluminium, steel tariffs, the U.S. doubles tariffs to 50% from June 4 

Even as India has formally notified the World Trade Organisation (WTO) of its intention to suspend trade concessions granted to the U.S. due to the 25% tariff charged by it on import of steel and aluminium products, U.S. President Donald Trump has announced that he will raise the tariff of steel and aluminium imports to 50%, double that of the existing 25%, from June 4.

The U.S. announcement assumes significance as it comes at a time when India’s WTO move was seen as a negotiating tool to make the U.S. keep some of its recent tariff measures in abeyance as part of an early, interim bilateral trade agreement deal currently being discussed between the two countries. 

The tariff hike will have a direct impact on India’s steel and aluminium exporters. According to Delhi-based think tank Global Trade Research Initiative (GTRI), in FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the U.S.—with key categories including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related articles. These exports are now exposed to sharply higher U.S. tariffs, threatening the profitability of Indian producers and exporters. 

In its communication to the Council for Trade in Goods Committee on Safeguards of the WTO on May 12, India had said that the country’s countermeasures against the U.S. could include raising tariffs on a list of US imports in a manner that is “substantially equivalent” to the damage inflicted on Indian exports. According to the notification, U.S. safeguard duties impact approximately $7.6 billion worth of Indian exports, resulting in an estimated $1.91 billion in additional duties collected by the U.S.

According to India’s WTO notification, unless consultations are initiated or the U.S. measures are withdrawn, India’s retaliatory tariffs can come into effect 30 days from the notification date, i.e., June 8, four days after Trump’s 50% tariff will take effect. 

GTRI observes that the economic impact of these higher tariffs on the U.S. economy will also be significant as steel prices in the U.S.—already high at around $984 per metric tonne—could touch about $1180 because of the additional tariffs, squeezing its domestic industries such as automotive, construction, and manufacturing that depend on steel and aluminium as key inputs. 

Whether India will announce a proportional economic response, as indicated in its WTO notification or not will now depend on the progress of the India-U.S. bilateral trade deal talks.