The “affirmative final determinations” by the United States (US) Commerce Department – which found that South Africa was dumping steel rod exports in the US – appear to be just “the tip of the iceberg” and could be a precursor to an extension to other domestic steel products. “The steel industry is under intense pressure globally and this action by the US could potentially result in many overseas trading partners starting to retaliate and protect their industries,” said chief economist of the Steel and Engineering Industries Federation of Southern Africa (Seifsa), Dr Michael Ade. The decision by the US Commerce Department follows last week’s announcement by US secretary of commerce, Wilbur Ross, of affirmative final determination in the anti-dumping investigations against South Africa. The investigation found that exporters from South Africa had sold steel rod in the US at between 135% to 142% less than fair value. The next step is for the US International Trade Commission (ITC) to make affirmative final injury determinations and for the US Commerce Department to issue anti-dumping duties. According to Ross, the ITC is scheduled to make its determination on February 22. He was adamant that while the US valued its relationship with South Africa, even its closest friends “must play by the rules”. The US administration under president Donald Trump has taken an increasingly protectionist stance around global trade, with the country having increased its anti-dumping and countervailing duty investigations by 58% between January 20, 2017 and January 9, 2018. According to statistics on the US Commerce Department website, in 2016 there were 52 investigations compared to 82 in the following year. Ade told FTW Seifsa believed the investigation by the US was a ‘”tit-for-tat retaliation” for the South African domestic industry successfully pushing for import tariffs and safeguard duties on cheap international imports last July. At the time SA applied for the anti-dumping duties, Minister of Trade and Industry, Dr Rob Davies, said the country had “no choice” but to impose emergency safeguard tariffs on imports of certain flat hot-rolled steel products to protect local industry. He said the country had to ensure it maintained the primary steel manufacturing skills and capacity in SA. “The levels of protection we’ve deployed in the country are modest by global comparison,” Davies said. Ade agreed with Davies, pointing out that the latest developments could potentially further dampen production in the local steel industry, reducing steel exports to the US and depriving the struggling local industry of “muchneeded foreign reserves”. “Seifsa is gravely concerned about the impact this could have, especially given that in 2016 exports of carbon and alloy steel wire to the US were valued at an estimated US$7.1 million,” he commented.
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Even the US’s greatest friends must play by the rules. – Wilbur Ross
