10% tariff to protect steel sector

THE GOVERNMENT would impose a 10 percent import tariff on steel imports to protect the struggling industry, with the possibility of hiking them further, an industry body said yesterday.

Cheap imports from China are hurting steel makers in South Africa, which currently does not have import duties on steel. As many as 200 000 jobs are at risk due to a global supply glut of the commodity, ArcelorMittal South Africa has warned.

“The first application for tariffs at 10 percent of the WTO (World Trade Organisation) bound rate will be signed off next week with conditions which are not yet finalised,” Steel and Engineering Industries Federation of Southern Africa (Seifsa) said, without giving a firm date for a tariff hike.

The WTO allows countries to raise tariffs by up to 10 percent to protect local industries.

The government declined to comment, but said in a statement it was considering “various tariff applications”.

Chief executives in the steel industry and labour unions also said the government in a meeting on Friday had committed to introducing a 10 percent tariff on imported steel to protect the industry.

One of the conditions for the tariff hike was that the steel industry could not raise the price of steel to “unaffordable levels”, Seifsa said.

ArcelorMittal South Africa has warned it could close a plant that employs 1 200 people while smaller rival Evraz Highveld Steel and Vanadium has been placed in the hands of administrators.

ArcelorMittal chief executive Paul O’Flaherty said last week that the (steel) company was willing to cap its profit margin if the government imposed import duties on imported steel.