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Davies calls for Trump tariff exemptions, warns against car levies

Jul 16 2018 13:24
Jan Cronje

Minister of Trade and Industry Rob Davies has again argued for an exemption for tariffs on exports of steel and aluminium into the US, saying SA metal exports add value to US manufacturing.

US President Donald Trump announced the decision to levy a 10% tariff on the imports of aluminium products, and a 25% tariff for steel, in early March.

Davies is part of the SA delegation participating in the 17th Africa Growth and Opportunity Act (AGOA) Forum in Washington DC. 

He spoke to US Trade Representative Robert Lighthizer, and Secretary of Commerce Wilbur Ross, as well as US Senators Chris Coons and Johnny Isakson. 

The minister, in a statement released Sunday, said SA exports of steel to the US account for less than 1% of total US imports and 0.3% of total US steel demand. Exports of aluminium were about 1.6% of total US aluminium imports.

"It is clear that SA does not pose a threat to US national security and the steel and aluminium industries, but it is a source of strategic primary and secondary steel used in further value-added manufacturing in the US," he said.

South Africa is not among the countries that have received tariff exemptions. 

Industry body the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said in May that the steel tariffs could cost local exporters an estimated R3bn.

Car tariffs next? 

Davies also expressed his concern in his meeting with the impact of an on-going US investigation into levying tariffs on the imports of cars and auto components. 

SA accounts for 0.4% of total US imports of automotive products. 

Davies said that "one of the South African auto manufacturers would no longer be exporting automobiles to the US" – he did not say which – if the tariffs were instituted.

This comes after Ross announced in late May that he would begin a probe into levying tariffs on the imports of cars and related components in the US. 

"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," said Ross in a statement on May 23.

"The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security."

South Africa has been selling its car production industry as a source of foreign direct investment. President Cyril Ramaphosa was on hand when, late in June, Mercedes-Benz announced a R10bn expansion of its current auto plant in East London

"[Mercedes-Benz] has made an investment in the people of this country. Where it has led, we expect many other companies to follow," the president said at the time. 

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