Fin24.com | US steel and aluminium tariffs to cost exporters R3bn, says industry body

Johannesburg – The decision by the US government not to exempt South African steel products from import duties will cost local exporters an estimated R3bn, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) said on Wednesday.

US President Donald Trump recently signed proclamations granting a select number of countries import duties exemptions, following months of negotiations.

“The decision by the US to reject SA’s application for exemption is a travesty,” said Seifsa chief economist Michael Ade. 

“The proclamation by the US will directly cost South African exporters roughly R3bn worth of steel products and R474m worth of aluminium products respectively,” he said.

Countries and zones exempt from tariffs include the European Union, Mexico, South Korea, Australia, Argentina, Brazil and Canada.

The US is imposing a 10% ad valorem tariff on imports for aluminium products, and a 25% ad valorem tariff on imports for steel.

Seifsa said the decision will deprive the local industry of foreign currency and affect domestic foreign reserves, with an estimated 7 500 workers likely to be affected.

According to the organisation, South Africa’s exports of steel and aluminium to the US account for 1.4% and make up only 1.6% of US global imports.

Despite its small contribution, the import of products from South Africa is said to have been excluded because it could “impair” US national security.

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The bombshell decision followed South Africa’s high-level representations to the US authorities.

Minister of Trade and Industry Rob Davies earlier said the tariffs would put local jobs at risk, particularly in the aluminium industry.

Seifsa suggested that the only option available for South African exporters is to “individually convince their buyers in the US to lobby for exclusions for individual companies from SA on a case-by-case basis, rather than all South African exporters benefiting from a blanket exemption”.

The Democratic Alliance said it would be writing to Davies to ask him to provide a detailed account of the reasons given by the US to decline South Africa’s application for exemption, including plans to prevent possible job losses.

“Minister Rob Davies needs to provide a detailed account of the reasons given by the US to decline South Africa’s application for exemption from the steel tariffs,” said Dean Macpherson, the DA‘s spokesperson for trade and industry.

The party said it also needs clarity on the role played by US trade representatives in South Africa in informing the decision taken by the US government.

Govt must appeal decision, says Fedusa

The Federation of Unions of South Africa (Fedusa) wants the government to appeal the decision, as it is likely to affect jobs.

Fedusa dismissed the assertion that local steel exports pose a threat to the US national security, saying it would be working with with the International Trade Union Confederation and other fraternal labour formations in the US to “exert pressure on the Trump administration to reconsider its tariff decision against South Africa”.

“It is important to note that some of the exempted countries are the biggest exporters of steel and aluminium to the United States,” it said.

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