The India aluminum paradox

Why exports and imports are both seeing healthy growth

Trade tensions between the United States and India have been on the increase of late, thanks primarily to the trade policies of the Trump administration. Some recently released numbers show the extent to which such policies can—and cannot—influence bilateral trade patterns.

This is a story about the trade in steel and aluminum between the U.S. and India—mostly aluminum. The numbers show that India’s steel exports to the U.S. fell by 49% last year while exports of Indian aluminum to the U.S. went up by an impressive 58%.

The steel part of the statistic is easy to understand. President Donald Trump imposed an across-the-board 25% tariff on steel imports, with some exemptions, making Indian steel more expensive in the United States. But Trump also slapped a 10% tariff on aluminum imports. So why, then, did imports of aluminum from India increase, let alone by so much? And does it make sense that India’s imports of aluminum have also been increasing?