Washington/New Delhi, 11 February 2025: The stock market plummeted Tuesday afternoon, a day after U.S. President Donald Trump announced steep tariffs on steel and aluminium imports. At 1:41 p.m., the Sensex had fallen by 1,038 points, or 1.25%, while the Nifty dropped over 327 points, or 1.3%.
The 25% tariff on steel and aluminium, a key campaign promise, will take effect on March 4 and apply to all imports, including those from Canada and Brazil, the top two suppliers to the U.S. last year.
The move comes just two days before Prime Minister Narendra Modi’s scheduled visit to Washington, where he is expected to discuss trade and economic cooperation.
Ahead of the visit, Modi said the meeting would be “an opportunity to build upon the successes of our collaboration in his first term and develop an agenda to further deepen our partnership.”
The talks will also take place amid political tensions in India over the U.S. deportation of 104 Indian immigrants living illegally in the country.
Trump claims the tariffs will boost domestic production and create American jobs while cracking down on nations like Russia and China, which he accuses of circumventing existing duties.
However, industry experts warn of global disruptions. Canadian steelmakers have cautioned against “massive disruption,” while the European Commission has vowed to “protect the interests of European businesses, workers, and consumers.”
India, a minor steel supplier to the U.S., exported less than 100,000 tonnes of steel to Washington last year.
However, it remains one of the world’s largest aluminium producers, with the U.S. as its top export market. Indian industry executives told Reuters that aluminium exports could decline under the new tariffs, though producers like Vedanta and Hindalco may eventually find alternative markets.
Trump’s stance on trade has been firm. He previously called India a “very big abuser” and his top economic adviser, Kevin Hassett, described India’s tariffs as “enormously high” in a CNBC interview. Last month, Trump named India, Brazil, and China as nations that “mean us harm.”
Amid Trump’s aggressive tariff policies, India recently cut customs duties on several American imports, including high-end motorcycles, cars, and smartphone components—a move benefiting U.S. companies like Harley-Davidson, Tesla, and Apple. However, Finance Minister Nirmala Sitharaman denied the duty cuts were a response to Trump’s actions. “We are looking to strengthen the foundation of the Indian economy,” she told NDTV in an exclusive interview.
Tariffs in Trump’s First and Second Terms
Trump imposed similar tariffs during his first term (2017-2021) but later granted duty-free quotas to certain countries, including Canada and Mexico. His successor, Joe Biden, negotiated further exemptions for Britain, Japan, and the European Union.
While U.S. manufacturing jobs saw an initial rise due to tax cuts in Trump’s first term, the sector slumped after he introduced steel and aluminium tariffs in March 2018. By 2019, the first full year of those tariffs, the U.S. lost manufacturing jobs and industrial production declined.
Now in his second term, Trump has increasingly relied on tariffs as a policy tool. He recently threatened Colombia with a 25% levy after it refused to accept deported migrants, citing human rights concerns.
He has also imposed high tariffs on all imports from Canada and Mexico, demanding stricter border controls to curb drug trafficking—though these duties were paused until March 1 following security concessions.
Meanwhile, Trump’s trade war with China has escalated. He imposed a 10% tariff on all Chinese-made products entering the U.S., prompting Beijing to retaliate with duties on American coal and liquefied natural gas, which took effect Monday.
