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SA granted US tariff exemptions on some steel and aluminium products

Oct 25 2018 10:51
Lameez Omarjee, Fin24

The US has granted SA tariff exemptions on 161 aluminium and 36 steel products, the department of trade and industry (dti) has said.

In a statement on Wednesday, Trade and Industry Minister Rob Davies said he met with US trade officials in July to make further submissions on the matter of tariffs on SA steel and aluminium experts, after the exemptions were first denied in May.

The US has imposed a 10% ad valorem tariff on imports of aluminium products, and 25% ad valorem tariff on steel products on certain countries, for national security purposes.

At a briefing in March, Davies had stressed that the tariffs would pose a risk to jobs in the local aluminium industry. The state continued to engage with the US on the matter to find a "mutually acceptable outcome," Communications Minister Nomvula Mokonyane told journalists in a post Cabinet briefing in May.

Davies welcomed the product exemptions, saying it was a step towards "normalising" trade relations between South Africa and the US. The department said the exemptions would also help ensure that jobs will be retained.

"Over 800 US companies are represented in South Africa and the trade between the parties is relatively balanced with total trade reaching R161.4bn in 2017.

"The exemption of some of the aluminium and steel lines confirms that South Africa remains a source of strategic primary and secondary products used in further value-added manufacturing in the US, does not threaten US national security and contributes to jobs in both countries," the dti said.

The exempted products 

The newly-exempted products include aluminium foil and plates, hot rolled bars of steel and hot rolled sheets of steel, among others. The dti called for domestic exporters to engage with US buyers to request exemptions on all imports.

Industry body the Steel and Engineering Industries Federation of Southern Africa (Seifsa) has welcomed the exemptions. “This is really good news for South African companies which export to the US market. Hitherto, local companies had increasingly grown worried about the possibility of losing US market share and also not having existing contracts renewed upon expiration,” Seifsa chief economist Dr Michael Ade said.

Some US senators, including  Chris Coons, Johnny Isakson and Roger Wicker, had been pushing for the US to exempt SA steel and aluminium products from the tariffs, arguing that SA would place reciprocal tariffs ion US chicken imports. 

"We urge you to continue advancing our trade relationships on the continent by exempting South Africa from the Section 232 tariffs, which will in turn preserve our AGOA agreement with South Africa and support the US poultry industry," the three senators wrote on a joint letter  to US Secretary of Commerce Wilbur Ross in late September. 

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rob davies  |  steel  |  tariff  |  aluminium  |  trade and industry
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