SA has 'no choice' but to impose emergency steel tariff - trade minister

The tariff would be in place for 3 years, and is proposed to fall from 12% in the first year to 10% in the second year.

FILE: Trade and Industry Minister Rob Davies. Picture: GCIS

WADEVILLE, South Africa - South Africa had "no choice" but to impose emergency safeguard tariffs on imports of certain flat hot-rolled steel products to protect local industry, Minister of Trade and Industry Rob Davies said on Monday.

Africa's most industrial country is proposing to put on the safeguard duties from July, it said in a filing published by the World Trade Organisation in April.

The tariff would be in place for three years, and is proposed to fall from 12% in the first year to 10% in the second year and 8% in the third.

"We'll indicate what the quantum is when those processes are complete," Davies told Reuters on the sidelines of a visit to a pharmaceutical company.

"We got to defend to ensure that we maintain the primary steel manufacturing in South Africa. We got no choice actually, (if) we let it go then there will be a huge knock-on effect for the industry as a whole because we don't have the capacity to import anyway."

Domestic steel producers have said China, which produces half the world's steel, has been dumping excess output locally as consumption at home wanes and these low-priced imports have resulted in low sales volumes for the domestic firms.

Davies said the tariff would be imposed in a way that it also accommodates the downstream industry, where the main jobs are.

"The levels of protection we've deployed in South Africa are modest by global comparison," Davies said.

Emergency tariffs are used against an unforeseen surge of imports that threatens domestic producers. They are allowed under WTO rules but have to be notified to the WTO and justified by data, and can be challenged by other WTO members.