Instability fears raised

SOUTH AFRICA was on high alert this week as US President Donald Trump planned to impose steep import tariffs. Steel and aluminium barons joined the government in raising concerns about the impact of the unprecedented move on South Africa’s industry.

SA Institute of Steel Construction (Saisc) chief executive Paolo Trinchero said although the industry was waiting for Trump to finalise his decision, it was worried about the instability this would cause in the struggling industry.

“We have raised our concerns with the Department of Trade and Industry (DTI) and the governmentled steel task team. In our weak economy, we would hate to lose any business. Exports are important,

SA STEEL SALES TO THE US LAST YEAR WERE WORTH R11.25BN,WRITES

as the construction industry is subdued,” Trinchero said.

Trump this week announced plans to impose a global tariff of 25% on steel and 10% on aluminium imports. He hinted that he could exempt nations such as Canada and Mexico – on condition they agreed to an updated North American Free Trade Agreement with the US.

The move sparked threats of retaliation from US trading partners and warnings from his own party that it would hurt American businesses and consumers.

Last week, the DTI said South Africa’s steel exports to the US

DINEO FAKU

amounted to $950 million

(R11.25 billion) last year, and accounted for 1.4% of US imports.

The department said South Africa exported $375m of aluminium, accounting for 1.6% of US imports.

“It is clear South African exports do not pose a threat to US industry and jobs,” the DTI said. “The South African exports are in some cases used as input in US manufacturing processes, thus contributing to US jobs and production.”

The DTI said it was assessing the compatibility of the proposed measures with the rules of the World Trade Organisation.

Africa’s biggest steel producer, Arcelormittal SA, said it only dispatched 70 000 tons to the US in 2017, less than 2% of the company’s total sales of over 4m tons.

“Arcelormittal SA’S primary markets remain South Africa and Africa overland,” it said.

Acting executive director of the Aluminium Federation, Rentia Malan, said the tariff hike would hurt the industry. Her federation represents 100 companies.

Aluminium supplier and exporter Hulamin said it couldn’t comment “definitively until we’ve seen the final legislative changes”.

Global diversified mining company South32, which produces aluminium from a smelter in Richards Bay, said its US footprint was small as a share of total sales.