SA steel industry concerned about US import tariffs

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) is expressing concern over the impact of the United States' decision to impose permanent tariffs on the importation of steel and aluminium products. According to Michael Ade, Chief Economist at SEIFSA, the tariffs pose a threat to the South African steel industry, despite the fact that South African exports of steel and aluminium to the US only make up a small percentage of US global imports. Ade emphasized that the decision seems to be more politically motivated than based on genuine market threats. Ade pointed out that the combined export of steel and aluminium to the US from South Africa accounts for just about 3% and that these materials play a key strategic role in the US economy. They are used in construction, manufacturing sector, and household goods, rather than in military applications. Ade speculated that the decision to impose tariffs may be driven by broader geopolitical tensions between the US and China, rather than specific concerns about the South African industry. In response to the tariffs, SEIFSA is advising its members to engage with US companies that import their products on a case-by-case basis to seek exemptions. Ade highlighted the potential job losses that may result from reduced demand due to the tariffs. He mentioned a possible 7,500 job losses in the industry, which could have a significant impact on the South African economy. SEIFSA is also working on implementing a steel import monitoring system to track the inflow of products post-tariffs and prevent issues of dumping. The organization is collaborating with the South African Revenue Service (SARS) and the Department of Trade and Industry (DTI) to address the challenges posed by the tariffs. One potential solution suggested by Ade is to redirect exports to other regions or parts of the world to mitigate the effects of the US tariffs. However, he acknowledged the difficulty of redirecting exports due to existing exchange control systems. Ade reassured that South Africa's strict exchange control measures make it challenging for cheap imports to be rerouted into the US market, minimizing concerns about trade deflection. Overall, the South African steel industry is facing uncertainty and challenges as a result of the US import tariffs. SEIFSA and its members are working diligently to navigate the situation and protect the industry from potential job losses and economic impacts.