The stock market on Tuesday witnessed a sharp plunge, with the Sensex shedding 1,038 points and the Nifty down by more than 300 points, each at a fall of about 1.32%. This comes after U.S. President Donald Trump announced a 25% tariff on steel and aluminum imports.
Effective March 4, this tariff hike raises the aluminum rate from 10% to 25%, impacting all imports, including those from Canada and Brazil—top suppliers to the U.S. This announcement comes just two days before Prime Minister Narendra Modi’s visit to the U.S., where he hopes to deepen the bilateral partnership.
However, the backdrop of this diplomatic engagement includes a political controversy in India regarding the deportation of 104 Indian immigrants from the U.S. The new tariffs also extend to finished metal products, aiming to combat what Trump claims are efforts by countries like Russia and China to evade existing duties. He argues that these tariffs will enhance domestic production and create jobs for American workers.
Although India is a relatively small steel supplier to the United States, with exports last year estimated at under 100,000 tonnes, it is an important producer of aluminum. Industry executives say India’s aluminum exports could decline because of the tariffs, though companies like Vedanta and Hindalco may look for other markets.
Reacting to these actions, India slashed customs duties on certain American items, such as high-end motorbikes and smartphone parts. This is going to help benefit U.S.-based companies in India. This is not about the response from the Trump’s tariffs but because of the further strengthening of India’s economy by Finance Minister Nirmala Sitharaman.
The implications are that Trump would continue to take the action against the global economy and diplomatic fronts.
