Minister of Trade and Industry Rob Davies has advised exporters to make the most of the Africa Growth and Opportunity Act (Agoa) but not to become too dependent on it because its long-term prospects could be in doubt. Addressing the Exporters' Club Western Cape last week, he said discussions with American authorities were ongoing following his visit to Washington earlier this month after the US imposed import duties on steel (25%) and aluminium (10%) and announced it was looking at possibly doing the same with regard to vehicles and car components imported from South Africa under section 232 of the Trade Expansion Act. “The US is using a little-known and littleused justification of national security and its own domestic laws under section 232 to ramp up its tariffs on ranges of products,” he said. He added it was clear that the proposed tariff rate changes were the Trump administration’s way of solving the perceived disadvantages to the US. “We are affected because certain steel exports and aluminium have been subjected to the 232 tariffs. We have made representation and have told Washington that we don’t see ourselves as a national security threat to the US and that many of our lines are complementary to further processing within the US.” He said the US in return had asked South Africa to showcase what it was doing about the glut of steel in the market. “And it is indeed a big issue for us in South Africa. We have had to do things that we did not necessarily want to do with tariffs on local steel,” he said. “Steel prices have gone up and people don’t like it, but if we had lost steel making in South Africa we would have gone back to being a country producing iron ore with no value added. We also don’t have the port capacity to import all the steel we need for downstream industries to use.” Davies said this had all been explained to the US – along with the fact that local producers of citrus, macadamia nuts, canned fruit, wine and avocados all derived huge benefits thanks to Agoa. The same applied to the sale of cars and car parts. Last year duty-free automotive exports to the US amounted to R18.8 billion. “This week there is another set of hearings in the US on autos and motor vehicle parts. We are waiting for the outcome of this,” said Davies, indicating that he was not expecting much good news.
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The US is using a little-used justification of national security to ramp up its tariffs. – Rob Davies
