MethodologyContact usLogin
South African trade minister Rob Davies submitted a formal request to the United States in March asking that the country be exempted from the Section 232 tariffs of 25% on steel and 10% on aluminium. While several US allies were exempted soon after Trump announced the tariffs, no such accommodation for South Africa had been made public as of Tuesday April 10.
One approach would be to treat South Africa similarly to the arrangement with South Korea, which was excluded from the tariffs and instead will receive a quota.
Importers of South African steel “are hoping for an exemption at either last year’s quantities or close to such,” one trading source said, noting that these imports “are not market-disruptive” and generally “focus on items that do not go head to head with domestic steel producers.”
Meanwhile, a southern distributor believes South Africa should receive better treatment than South Korea.
“The Koreans have been dumping steel for years. South Africa? Just exempt those guys! They don’t hurt anybody and they don’t ship enough tons,” this distributor said.
The South African government confirmed that it has asked for exclusion from the tariffs and that discussions have taken place with several US agencies. Davies held a teleconference with a deputy in the US Trade Representative’s (USTR’s) office in March, according to Davies’ Department of Trade and Industry. South Africa’s ambassador to the US, Mninwa Mahlangu, has been in touch with US National Security Council staff, the State Department and USTR.
South Africa “does not a pose a threat to US national security and to the US steel and aluminium industries but is a source of strategic primary and secondary products used in further value-added manufacturing in the US, contributing to jobs in both countries,” South Africa’s Department of Trade and Industry said. “Furthermore, [South Africa] assured the US that, to a very large extent, the inputs for all steel and aluminium product exports to the US are sourced from local producers and that [South Africa] has a robust customs control system which prevents circumvention.”
The diplomatic-level talks have been “intense,” according to Michael Ade, chief economist at the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), which is advising South Africa government officials. Ade’s group has “been engaging some lobbyist groups in the US” to emphasize that imports from South Africa are a “value addition,” mostly representing “strategic inputs into the upsteam and downstream steel sectors” in the United States, he said.
“SEIFSA’s position is for a full exemption for South Africa,” Ade told American Metal Market via email on Tuesday. “We do not prefer quotas even though the possibility of … quotas forms part of the bilateral discussions with the US.”
Quotas “will do more harm than good to trading activities” that are vital to US industries, including construction, automotive, agricultural and other manufacturing, he said.
About 15,832 tonnes of steel was on pace to enter the US from South Africa in March, according to license data from the US Commerce Department’s Enforcement and Compliance division updated on April 10, down from 19,623 tonnes the previous month and from 24,562 tonnes in January. In February 2017, 25,236 tonnes of steel were imported from South Africa.
Hot-dipped galvanized sheet and strip imports, the nation’s biggest category, were licensed at 10,837 tonnes for March. This was on par with the 10,573 tonnes imported in February but still down from 14,693 tonnes in February 2017.
American Metal Market’s pricing assessment for imported hot-dipped galvanized 0.012-0.015-inch G30 coil stands at $1,100-1,200 per ton cfr Port of Houston.