Beijing has reacted predictably to the Donald Trump administration’s moves towards establishing steep tariffs on steel and aluminium imports on Friday, with hints at retaliatory measures. But given the US’s importance to China as an export market, Beijing is likely to tread warily, perhaps confining itself to surgical countermoves in the agriculture sector.
The truly intriguing aspect of the entire affair is the form the US tariffs take. Will they target China specifically or will they, as commerce secretary Wilbur Ross recommended, be global? The European Union has already started working on possible retaliatory measures.
This has implications for India. China, Germany and France are all among the top 10 sources for India’s steel imports. The beleaguered Indian steel industry saw some positive developments in the first half of 2017 with Chinese exports plunging. But if the US becomes an inhospitable market, will that drive down import prices in countries such as India? And if so, will the Indian government give in to industry pressure and ramp up anti-dumping measures as well?