Kolkata: The Donald Trump administration has decided to slash reduction in tariffs on a basket of select industrial and agricultural equipment which features
steel, aluminium or copper and the extent of reduction is from 25% to 15%, think tank GTRI (Global Trade Research Initiative) said on Tuesday. The Delhi-based think tank said that the 10 percentage point reduction will deliver modest benefits for India. The reduced rate will kick in from June 8, 2026 and will remain in force till the last day of 2027. This benefit has been announced against the backdrop of an Indian team negotiating the much-disucssed bilateral trade pactwith the US.
Which products will benefit
Therefore, exporters of some engineering goods, HVAC equipment, electrical equipment and agricultural machinery could gain from the new 15% tariff. The items that have been mentioned in the new list of reduced tariffs include heating and air-conditioning equipment, bulldozers, forklifts, harvesters, agricultural machinery and certain electrical grid equipment. Significantly, a category of 10% tariffs was introduced. It will be applicable on items that have been manufactured using at least 85% steel, aluminium or copper by weight from the US.
Section 232 items
However, items that contain 15% or less steel, aluminium or copper by weight will remain outside the purview of the Section 232 tariffs. Incidentally, Section 232 allows the US president to bypass Congress to tweak trade conditions if the department of commerce finds out that specific imports jeopardise the nation’s security. Section 232 regularly involves duties on steel, aluminum and copper.
The core metal tariffs will not be changed by this tweak. Most imported steel, aluminium and copper items will continue to attract 50% tariff. Many downstream products made from these metals will attract 25% duty, GTRI founder Ajay Srivastava. “However, the core issue remains unchanged: Indian exports of steel, aluminium and copper products continue to face the punitive 50 per cent Section 232 tariffs, while many downstream metal products remain subject to a 25 per cent duty,” he was quoted by PTI as saying.
In the last financial year, India imported $2.9 billion worth of steel, aluminium, copper and related items from the US. Indian manufacturers can use this raw material and manufacture items that will attract lower tariff when the items are exported to the US.
