US refuses to exempt SA from steel and aluminium duties
Trade and industry minister Rob Davies says the government remains engaged with the US and continues to request a country exemption
The government says it will continue to lobby the US for the exemption of its steel and aluminium from tariffs imposed by President Donald Trump earlier in 2018.
In a bid to protect the steel industry in the US, Trump signed a proclamation in March imposing a 10% tariff on imports of aluminium and a 25% tariff on imported steel.
The US excluded countries such as Mexico, Canada, South Korea, Australia, Argentina, Brazil and the entire EU from the new duties. SA has been asking for a similar exemption since then and the US has been refusing.
The tariffs, which will result in the displacement of SA's products in the US market, aggravated the problems of South African producers in grappling with excess capacity and weak demand.
According to trade and industry minister Rob Davies, SA’s exports to the US did not pose a threat to that country’s steel and aluminium industries because they accounted for 1%-2% of total US imports.
In July, the Department of Trade and Industry said companies that would feel the effect of the tariffs included Duferco Steel Processing, which it said exported 57% of production to US, and aluminium supplier and exporter Humalin (its exports to US accounted for 25% of its sales), according to the department’s presentation to parliament’s portfolio committee on trade and industry.
Despite extensive lobbying by SA, the US has refused to exempt the country. The lobbying included Davies’s meeting with US trade representative Robert Lighthizer and secretary of commerce Wilbur Ross at the AGOA Forum in July in Washington.
While the department wants a full exemption for SA from the tariffs, the US commerce department has granted product exemptions for imports of 161 aluminium and 36 steel products.
“The products exemptions are applicable to companies whose buyers in the US made requests to the commerce department for the products to be excluded from the section 232 duties,” the department said.
Exempted products included aluminium foil, aluminium plates, hot rolled steel bars, hot rolled steel sheets and cold rolled steel sheets.
Davies said the exclusion of the products was a step towards normalising trade relations between SA and the US. In 2017, trade between the two countries totalled R161.4bn .
“The exemption of some of the aluminium and steel lines confirms that SA remains a source of strategic and secondary products used in further value-added manufacturing in the US…. While SA welcomes this important relief to our exports, government remains engaged with the US government and continues to request a country exemption,” the department said.