Davies hopes quotas will help SA avoid Trump duties

SA was prepared to negotiate a quota for its steel and aluminium exports to the US as a way of avoiding the imposition of the ad valorem tariffs that President Donald Trump had decided on, Trade and Industry Minister Rob Davies said on Monday.

Davies addressed a media briefing on the proclamations signed by Trump, which impose a 10% ad valorem tariff on imports of aluminium products and a 25% ad valorem tariff on imports of steel products on the grounds that they threaten US national security.

The proclamations make provision for country-based exclusions from the duties should the US and that country arrive at a satisfactory alternative to tackle the perceived threat to national security.

Canada and Mexico have been excluded from the duties, which came into force on Friday, and SA has submitted an application for an exemption

from these duties. Davies said he had been informed by ambassador CJ Mahoney, the deputy US trade representative, during a teleconference on Thursday that Trump would decide on whether to grant exemptions to applicant countries before the end of April.

The decision would be based on whether SA would be prepared to negotiate a quota; information about what SA was doing to deal with the global glut of steel in its own market; whether SA could give the assurance that if it were given access to the US market it would not allow itself to be a gateway for transhipment of products from other countries; and information on SA’s role in the World Steel Association.

He said that Trump’s decision on exemptions would be based on the US evaluation of its economic and political security and its assessment of SA as a partner in the search for global economic security.

Davies said SA was prepared to talk about a quota, which he did not believe would enlarge access for South African steel and aluminium exports to the US. He met with the companies involved in steel and aluminium exports to the US on Monday to discuss a possible quota and said they would be making their own representations to the US government.

Despite SA being a small player in the US steel and aluminium market, Davies said a number of companies could be significantly negatively affected by the imposition of the duties and a few thousand jobs could be at risk.

These companies were involved in value chains where further value addition was created in the US or where inputs were imported from the US into the South African operations.