Solidarity worried about impact of US tariffs on South African steel industry

11th April 2018 By: Simone Liedtke - Writer

South African trade union Solidarity has 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 on steel and the 10% tariff on aluminium affects the South African steel industry directly as the industry exports around 330 000 t (about 5% of the local industry’s production) to the US.

According to Solidarity metal and engineering industry deputy general-secretary 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 pressure. The local industry simply cannot afford any further setbacks,” he lamented.

Unfortunately, Solidarity states, South Africa’s Department of Trade and Industry was unsuccessful in its 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,” Croucamp warned.

SOUTH KOREAN EXAMPLE?

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 and steel exports from South Korea to the US will be limited to a quota of 70% of 2017’s average exports, Croucamp noted.

He further commented that Trade and Industry Minister Dr Rob Davies has already indicated that domestic steel and aluminium producers are willing to agree to 70% of 2017’s exports average as a quota to the US, which has already been put forward to the US.

“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,” Croucamp added.

Local players affected by the tariffs include ArcelorMittal South Africa with its exports of around 70 000 t/y of steel to the US, South32, Hulamin and Columbus Stainless.

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 campaign in support of the domestic steel industry.

Solidarity’s ‘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.