US President Donald Trump’s decision to impose a 25 per cent tariff on all steel imports could lead to increased dumping in global markets, driving down prices and forcing large producers in China and other countries to seek alternative markets like India through deep discounts, analysts and steelmakers warned.
The move is expected to put pressure on domestic steel prices in India thus impacting the margins of Indian steelmakers including Tata Steel, JSW Steel, and ArcelorMittal-Nippon Steel.
- Read: India weighs Trump’s steel tariffs, eyes possible exemption
Even though Canada remained the largest steel supplier to the US with $12.98 billion in exports despite an 8.2 per cent on-year decline, China’s steel exports to the US grew by 10.5 per cent to reach $12.48 billion. The other large steel suppliers to the US are Brazil, Mexico and South Korea.
Cheap influx
Anubhav Kathuria, Managing Director of Synergy Steels, noted that higher US tariffs could divert Chinese and other Asian exports to India, intensifying competition and creating downward pressure on domestic prices. This, he warned, would particularly hurt small Indian producers, as they struggle to compete with low-cost Chinese steel imports.
- Read more: India explores US steel imports to counter Trump tariffs, eyes safeguard duties on China
However, Kathuria expressed optimism about Prime Minister Narendra Modi’s upcoming visit to the US, where discussions on a possible mini-trade deal could prioritise sectors like steel and stainless steel.
Ajay Garg, CEO, SMC Global Securities, said there will be a risk of excessive competition impacting steel players at a global level and putting pressure on steel prices.
However, he suggested that India might remain partially shielded, as the infrastructure push in the recent Budget is expected to increase demand for steel and support domestic manufacturers.
One factor amplifying the impact of the tariff hike is the removal of duty exemptions on imports priced below $800 per tonne. Previously, over 1 billion small packages — valued at $100–$150 billion annually — entered the US tariff-free, with two-thirds originating from China.
Manish Bhandari, CEO and Portfolio Manager at Vallum Capital Advisors, said with the removal of this exemption, the effective tariff increase is closer to 12 percentage points, rather than the stated 10 per cent. This raises the real cost of Chinese exports, making alternative markets even more attractive for Chinese steel producers.
Industry experts anticipate that Chinese firms will redirect exports, adjust pricing, and expand into alternative markets like India to absorb excess supply. Puneet Singhania, Director of Master Trust Group, warned that China’s overcapacity problem has already led to an influx of cheap steel into India.
Puneet Singhania, Director Master Trust Group said the Chinese manufacturers facing overcapacity, are already supplying their excess steel production in India at very competitive prices through various trade routes which has widely affected India’s domestic steel industry. He cautioned that if Chinese producers continue dumping steel at below-market prices, it could leave Indian manufacturers struggling to compete.
The tariff hike comes at a time when India remains a net steel importer. Between April and January of this fiscal year, inbound steel shipments increased by over 20 per cent to 8.29 million tonnes (mt), compared to 6.89 mt in the same period last year..
