Wednesday, April 11th, 2018
Solidarity today expressed its concern about the possible impact of the import tariffs on steel and aluminium products recently announced by the US. The 25% import tariff and the 10% tariff on aluminium affects the South African steel industry directly as the industry exports around 330 000 tonnes, that is 5% of the local industry’s production, to the US.
According to Solidarity’s Deputy General Secretary for the Metal and Engineering Industry Marius Croucamp, there is major concern among local players in the industry. “There is real concern among players that the tariffs imposed by the US on steel and aluminium products will hurt our local industry, resulting in possible job losses. The South African steel and aluminium industry experienced severe contraction over the past few years and is still under major pressure. The local industry simply cannot afford any further setbacks,” Croucamp said.
Trade and Industry Department officials did not succeed in their first attempt at convincing the US to exempt South Africa from the tariffs the Trump administration imposed on steel and aluminium. “The fact that the South African government had to make further submissions to the US just to be considered at all for discount on or exemptions from import tariffs is indicative of just how complex the matter is. In negotiations on steel tariffs the US managed to amend various trade agreements with, among others, South Korea. The US will now export significantly more cars to South Korea but steel exports from South Korea to the US will be limited to a quota of 70% of 2017’s average exports,” Croucamp said.
Croucamp also said that Trade and Industry Minister Dr Rob Davis already indicated that domestic steel and aluminium producers are willing to agree to 70% export quotas to the US, which have already been put forward to the Americans. “This points to a possible best case scenario involving a reduction of about 30% in export production to the US which is not good news for the domestic industry at all,” Croucamp added.
Local players affected by the tariffs include ArcelorMittal South Africa with its exports of around 70 000 tonnes of steel to the US annually, South 32, Hulamin and Columbus. Meanwhile, China has filed a complaint with the World Trade Organisation (WTO) over the steel and aluminium tariffs imposed by the US. In terms of the WTO’s prescribed procedure consultation first needs to take place between the US and China. The dispute can then be adjudicated by the WTO after 60 days.
Last year, Solidarity launched a major campaign in support of the domestic steel industry. Solidarity’s campaign, known as the Support our Steel Campaign, offers support to the domestic steel industry to help ensure its sustainability. The campaign includes regular engagement with government, talks with players in the industry as well as doing roadshows at factories and plants.