South Africa Scrutinizes US Aluminium, Steel Tariffs

The South African government is studying United States President Donald Trump’s proclamation to impose a 10% tariff on aluminium and 25% tariff on steel articles, and its implications for South African exports.

The Department of Trade and Industry (dti) says it has taken note of the 8 March proclamations signed by President Trump to impose a 10% ad valorem tariff on aluminium articles and a 25% ad valorem tariff on steel articles, which will come into effect later this month.

“South Africa is studying the proclamation and its implications for the domestic industry in South Africa,” said the dti on Friday.

South Africa’s steel exports to the US amounted to US$950 million in 2017 and accounted for 1.4% of the US’s global imports. In the case of aluminium, South African exports were at US$375 million in 2017, accounting for 1.6% of US imports from all global suppliers.

The dti said it is clear that South Africa’s exports do not impose a threat to US industry and jobs.

South African exports of aluminium and steel are in some cases used as inputs into further processes in the US manufacturing sector, contributing to US jobs and production.

“The Department of Trade and Industry is fully engaged with the matter and continues to have discussions with the US on this issue. A formal submission will also be made to the US, as is provided for in the proclamations,” said the department.

Modification of restrictions

The US will consider specific requests from affected domestic parties to exclude from any adopted import restrictions. This is for steel articles for which the Secretary of Commerce determines that there is lack of sufficient US production capacity of comparable products, or to exclude steel articles from such restrictions for specific national security-based considerations.

The proclamations make a provision for any country with which the US has a security relationship to discuss alternative ways to address the threatened impairment of the national security caused by imports from that country.

Should the US and that country arrive at a satisfactory alternative means to address the threat to national security, the US President may remove or modify the restriction on steel article imports from that country and, if necessary, make any corresponding adjustments to the tariff as it applies to other countries as national security interests require.

Aluminium

In relation to aluminium, the products to be affected are defined in the Harmonized Tariff Schedule (HTS) as: (a) unwrought aluminum (HTS 7601); (b) aluminum bars, rods, and profiles (HTS 7604); (c) aluminum wire (HTS 7605); (d) aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607); (e) aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609); and (f) aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70), including any subsequent revisions to these HTS classifications.

Steel 

The products affected in relation to steel are defined at the Harmonized Tariff Schedule (HTS) 6-digit level as: 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTS classifications.

Tariff implementation date

In addition, the Secretary of Commerce is expected to publish the Federal Register on the appeal process for US buyers to apply for exclusion within 10 days. The tariffs will be implemented on 23 March 2018, if no alternative arrangement is agreed to with individual countries.

On 1 March, President Trump held a listening session with representatives from large steel and aluminium companies. At the session, President Trump heard concerns relating to imports of steel and aluminium raised by US companies.

In its earlier response, the dti said it was fully engaged with the matter and had undertaken discussions with the US in a number of forums.

The department was at the time also meeting with South African companies that have export interests in the US to ascertain the possible impact of the proposed measures.