Trump Cuts Tariffs for Key US Trade Partners, but India Still Faces Steep Duties

US President Donald Trump on Tuesday announced a temporary reduction in tariffs for a range of goods, including agricultural and industrial equipment. Trump lowered tariffs by 10 percentage points, bringing duties down to 15% until December 2027.

According to reports, the reduction is intended to ease costs for producers while supporting investment in the US agricultural sector.

Under the industrial equipment category, mobile industrial machinery, including bulldozers and forklifts imported from countries covered by US trade agreements, will also be eligible for the reduced duties.

Foreign manufacturers may qualify for an even lower 10% tariff rate. However, the benefit will apply only if the imported capital equipment contains at least 85% US-sourced steel or aluminium.

The White House said the measure is aimed at accelerating near-term investments and helping rebuild the US industrial base.

"President Trump has utilized tariffs on imported aluminium, steel, and copper to protect the national security of the United States, the economic resilience of vital industries, and the financial position of American families, communities, and businesses from the threat of low-priced foreign imports," a White House statement said.

The tariff reduction falls under the Section 232 metals regime of the Trade Expansion Act of 1962. Section 232 allows the US President to impose import tariffs if the Commerce Department determines that imports threaten national security.

The revision in tariff structures comes as the Trump administration steps up efforts to boost domestic manufacturing capacity across sectors such as semiconductors, automobiles, pharmaceuticals, timber, and critical minerals.

Which Countries Are Benefiting?

The revised tariffs will take effect on June 8. Equipment imported from Japan, South Korea, the European Union, the United Kingdom, and Taiwan will be eligible for the reduced 15% duty.

For imports from Canada and Mexico, products that qualify under the US-Mexico-Canada Agreement (USMCA) will attract a 25% duty only on their non-US content.

India, however, does not appear to benefit from the revised tariff structure. In 2023, New Delhi sought an exemption from US steel and aluminium tariffs in exchange for reducing certain duties on American agricultural products. However, Washington did not accept the proposal.

Trump had imposed a 25% tariff on steel imports and a 10% tariff on aluminium imports. In response, India levied retaliatory tariffs on nearly 28 US products, including agricultural goods such as almonds, apples, and walnuts.

India now face a 50% tariff on steel and aluminium exports to the United States, beginning June 4, limiting the competitiveness of Indian metal exports in the American market.