US tariffs on agricultural machines to be cut, 50% metal levies stay

New Delhi: The US will cut tariffs on farm equipment such as combines and harvesters to 15% from 25%. In addition, a new 10% tariff category has been introduced for imported products manufactured using at least 85% US-origin steel, aluminium or copper by weight.

Under a proclamation issued late Monday, the White House announced limited changes to its Section 232 metal tariffs to reduce costs for American farmers and manufacturers, adding that the tariffs will last till December 31, 2027.

The announcement came amid India and the US starting three-day trade talks Tuesday where Washington's Section 301 tariffs would be taken up.


The US on Monday proposed a new punitive tariff of 25% on several imports from Brazil, after deciding the latter's practices were unfair on a range of issues from digital trade to illegal deforestation under the Section 301 trade legislation.

As per the White House fact sheet, products containing 15% or less imported steel, aluminium, or copper by weight will continue to remain exempt from Section 232 tariffs.

However, the core metal tariffs remain unchanged. Most imported steel, aluminium and copper articles will continue to face a 50% tariff, while many downstream and derivative products made from these metals will remain subject to a 25% duty.

Trade experts said the changes offer limited benefits to India.

"While exporters of engineering goods, HVAC equipment, electrical equipment and agricultural machinery may gain from the reduced 15% tariff, and some manufacturers could potentially qualify for the new 10% rate by using US-origin metals, the overall impact is likely to be modest," said Ajay Srivastava, co-founder at economic think tank GTRI.

India imported about $2.9 billion worth of steel, aluminium, copper, and related products from the US in FY26, creating some opportunity for manufacturers in the country to use American-origin inputs and qualify for the lower tariff when exporting finished products back to the US.

However, Srivastava said the core issue remains unchanged as Indian exports of steel, aluminium and copper products continue to face the punitive 50% Section 232 tariffs, while many downstream metal products remain subject to a 25% duty.