A government trade body looking into the country's struggling steel sector proposes duties starting at 10% to defend the industry from an influx of imports, mainly from China.
The International Trade Administration Commission (Itac) released its preliminary findings after a broad review of steel tariffs ordered by the government in March as part of a response to oversupply, weak local demand and high input costs in South Africa's steel industry.
Itac recommended the government take emergency action under World Trade Organisation (WTO) rules to defend the sector and proposed import duties starting at 10% on steel products, it said.
Imports are estimated to meet about 35% of domestic consumption, leaving companies such as ArcelorMittal South Africa, the country's biggest primary steel producer, at risk of collapse and putting thousands of jobs in danger.
Among its preliminary findings, Itac said “the ongoing geopolitical landscape constitutes an unprecedented emergency, necessitating urgent action in terms of article 19 and article 21 of the General Agreement on Tariffs Trade”.
Those rules allow WTO members to suspend or withdraw tariff concessions if “any product is being imported in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers”.
Itac called on policymakers to consider whether the trade conditions amount to an emergency in terms of the WTO rules, its chief commissioner Ayabonga Cawe told Reuters in an interview.
Cawe said steel import restrictions imposed by the EU and the UK in recent months raised concerns of dumping and diversion in markets such as South Africa.
US President Donald Trump's tariffs have added to South Africa's challenges.
The commission, whose role includes conducting tariff investigations, offering trade remedies and implementing import and export controls, said its initial findings would not become final until it has received and reviewed feedback from the public over the next two weeks.
It said in a notice it had received more than 150 submissions, “ranging from requests for duty increases and the creation of rebate provisions to inclusion of specific products under import control”.
Reuters
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