Day: May 31, 2025

US President Donald Trump at a rally in Pennsylvania announced that the United States would double steel tariffs from 25% to 50%, from next week onwards, while promoting the partnership between Japan’s Nippon Steel and US Steel.

Later, taking to his Truth Social account, Trump wrote, “It is my great honour to raise the Tariffs on steel and aluminium from 25% to 50%, effective Wednesday, June 4th. Our steel and aluminum industries are coming back like never before. This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers. MAKE AMERICA GREAT AGAIN!”

What will new tariffs mean for US Steel and Nippon Steel deal?

Trump claimed that new tariffs would benefit the partnership, which aims to create 70,000 jobs and inject $14 billion into the US economy.

“I believe that this group of people that just made this investments right now are very happy, because that means that nobody’s going to be able to steal your industry,” Trump said. “It’s at 25%, they can sort of get over that fence, at 50%, they can no longer get over the fence,” Trump, who recently approved the US Steel and Nippon Steel partnership, was quoted as saying.

Trump criticises steel produced in China

Trump also took a dig at the steel produced in Shanghai and explained how his tariffs will aid domestic production. 

“We don’t want America’s future to be built with shoddy steel from Shanghai—we want it built with the strength and the pride of Pittsburgh!” Trump posted on Truth Social.

Trump’s claim of trade deal violation

Trump previously accused China of violating the trade deal that aimed to reduce tariffs.

“China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!,” Trump wrote in a post on his Truth Social platform.

China is the world’s largest steel producer and exporter. However, after the imposition of a 25% tariff in 2018, China’s steel exports to the US have significantly declined.

The trade deal with China made in mid-May, according to Trump, was a “fast deal”, where officials of both countries paused tariffs of over 125% for 90 days. According to Trump, the trade agreement was finalised to prevent China from a “devastating” situation, including factory closures and civil unrest stemming from his tariffs, which reached as high as 145% on Chinese imports.

However, Trump did not clarify how the trade deal was violated or what action he plans to take against China.

When asked about China trade in the Oval Office on Friday, the report quoted Trump saying, “I’m sure that I’ll speak to President Xi, and hopefully we’ll work that out.”

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Chief Economic Adviser (CEA) Anantha Nageswaran said that the Indian economy is performing well and may achieve a growth rate at the upper end of its 6.3-6.8 per cent projection, provided there are continued measures to promote foreign direct investment and an increase in capital investment by the private sector, along with boosted urban consumption.

“All in all, given the global environment, our economy is doing quite well,” the CEA told reporters on Friday at a virtual press conference after GDP data for 2024-25 and January-March were released.

“And if we continue with the efforts to bring in more foreign direct investment and the private sector, if it continues its increase in capital investment, which we saw in 2024-25 and urban consumption picks up on the back of let’s say, better capital formation, hiring and compensation, then we can probably achieve a growth rate which is at the higher end of this range (6.3-6.8 per cent),” he added.

GDP numbers

The Indian economy grew by 6.5% in real terms for FY25, aligning with expectations.

As per the second advance estimates of National Statistical Office (NSO), the Indian economy was projected to grow at 6.5 per cent in 2024-25. The Reserve Bank of India (RBI) estimated 6.5 per cent GDP growth for the fiscal year 2024-25.

Notably, India’s GDP grew by 9.2 per cent in FY24, while the economy grew 7.2 per cent in FY23 and 8.7 per cent in FY22.

The government also released the official GDP growth data for the January-March quarter on Friday. The economy grew 7.4 per cent for the quarter ended on March 31, 2025.

Meanwhile, the growth rate of the Indian economy in the April-June, July-September, and October-December 2024 quarters stood at 6.7 per cent, 5.6 per cent, and 6.2 per cent, respectively.

Impact of unusual monsoon

Speaking on the impact of the unusual onset of monsoon and its impact on the vegetable prices, Nageswaran said, “To say there will be a problem as of now, I think every indication is that crop produce will be good and with adequate inventory, the benign food price trends will continue.”

Monsoon rainfall is expected to be above normal in India, particularly in India’s key rain-fed agricultural belt, as per IMD. Additionally, monsoon arrived early in several states this year.

Global growth expectations

CEA stated that global growth for 2025 and 2026 is expected to be slow amid the global uncertainties. However, the forecast cuts will be smaller for India in the global cuts.

CEA on food inflation

Speaking on inflation, he further said that food inflation is likely to remain low due to a good harvest and above normal monsoon.

“Food Inflation remains benign due to good rabi harvest, higher summer sowing, healthy procurement, and above-normal monsoon. Exports remain robust, forex reserves provide 11 months of import cover. Declining crude oil prices will potentially lower import bills, create fiscal space and alleviate external economic pressures,” CEA said.

Outlook for India’s FY 26 growth

The government maintains its outlook for 2025-26 growth at 6.3-6.8 per cent, driven primarily by private consumption, particularly the rural rebound, and growth in services exports. Various agencies have projected India’s growth to fall within the range of 6.3-6.7 per cent for 2025-26.

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India halved the basic import tax on crude edible oils to 10 per cent on Friday, the government said, as the world’s biggest vegetable oil importer tries to bring down food prices and help the local refining industry.

The customs duty applies to crude palm oil FCPOc3, crude soy oil BOc2 and crude sunflower oil.

It will effectively bring down the total import duty on the three oils to 16.5 per cent from earlier 27.5 per cent as they are also subject to India’s Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.

“This is a win-win situation for vegetable oil refiners as well as consumers, as local prices will go down due to the duty reduction,” said B.V. Mehta, executive director of the Solvent Extractors’ Association of India (SEA).

The government did not change the import duty on refined palm oil, refined soyoil or refined sunflower oil, which currently attract a 35.75 per cent import tax.

The import duty gap between refined and crude edible oils has risen to 19.25 per cent, which will prompt importers to bring in crude edible oils instead of refined oils and boost the local refining industry, Mehta said.

India meets more than 70 per cent of its vegetable oil demand through imports. It buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage, said the cut in the basic duty would bring down edible oil prices and help revive retail demand, which has been subdued in recent months.

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