The Finance Ministry of India announced on Monday that it would be imposing a 12 percent tariff on some steel products — a move apparently intended to prevent China from “dumping” large amounts of steel into the Indian market and elbowing domestic companies out of business.
Indian officials had floated the potential of a 12 percent “safeguard duty” in late March in anticipation of news that the United States could impose tariffs that would lead China to see alternative markets to America for products that Americans would no longer want to buy at higher prices. President Donald Trump announced a wave of reciprocal tariffs on nearly every country that does business with America on April 2, including India, but has since suspended all but the tariffs on China, which he has increased. Trump has increased tariffs on Chinese goods to 145 percent and threatened to raise them to as high as 245 percent.
The Hindu nationalist government of Prime Minister Narendra Modi, which has dedicated much of its economic policy to usurping China’s position as the world’s largest manufacturing state, has embraced President Trump’s policies even as it faces a potential 34 percent tariff if New Delhi does not broker a deal with Washington following the end of a 90-day pause period. Indian Commerce Minister Piyush Goyal called the tariffs the “opportunity of a lifetime” for India, noting that other countries faced much steeper tariff rates and are in less favorable positions to negotiate.
India announced the new tariffs on Chinese steel on Monday during a visit by Vice President JD Vance and his family to the country. Vance announced in a subsequent speech on Tuesday that America and India had agreed to the terms of negotiations for a new trade deal, the first major step in restructuring the bilateral economic relationship.
The Finance Ministry justified the “safeguard duty” — a kind of tariff meant to protect local industry — as necessary to protect domestic steel companies from unfair foreign competition. The statement did not specifically mention China as the target of the tariffs, though the large percentage of the market that it controls makes it a clear target for such a duty.
“A flood of Chinese steel in recent years has pushed some Indian mills to scale down operations and mull job cuts, and India is one of a number of countries to have contemplated action to stem imports to protect local industry,” Reuters reported on Monday.
Like India, Vietnam announced anti-dumping steel tariffs in early April, shortly after the Trump tariff announcement. The steel tariffs in Vietnam affected imports from China and South Korea — Chinese manufacturers must pay a 37.13 percent tariff, which South Korean companies will pay 15.67 percent except for Hyundai Steel, which received a discounted rate of 13.7 percent. The Vietnamese Trade Ministry issued a statement justifying the tariffs to “curb the rapid growth of imports which could cause serious harm to the domestic industry.”
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