US Tariffs May Change Global Trade Flows

The imposition of higher tariffs by the US may change the global "trade flows", increasing the chances of India becoming more vulnerable to steel imports, SAIL Chairman Amarendu Prakash said on Wednesday.

The Donald Trump administration has proposed a 25 per cent tariffs on all steel and aluminium imports into the US and also announced imposing reciprocal tariffs on all its trading partners including India with effect from April 2. Responding to a query on the US tariff moves, Prakash said it may change the trade flows.

Traditionally steel has been travelling (exporting) from Asian countries to the US and Europe. Some steel was being exported to the US from Europe. Once the reciprocal tariffs take effect, such exports would become unviable. "That will mean Asian countries -- China, South Korea, Japan -- that are exporting to Europe, that steel becomes free and will be floating around in the world. This floating trade might come to India," he said.

When asked if the tariff will impact India's exports of steel to the US, the chairman said it will not affect much as the commodity's outbound shipment is not in large quantity. "That is not a big challenge. The critical steel or critical components, those capabilities do not get developed overnight. So the prices will go up, but the US will continue to import those items which they do not produce.