African trade ministers – including Minister of Trade and Industry Dr Rob Davies – used last week’s African Growth and Opportunity Act (Agoa) Forum in Washington to reiterate a call to exempt sub-Saharan African countries from Section 232 steel and aluminium import duties.
Davies said United States president Donald Trump’s trade wars were “eroding Agoa preferences” resulting from the measures on steel and aluminium and possibly on automotive parts and components. Since introducing the punitive tariffs – of 10% on aluminium imports and 25% on steel imports – in March this year, Trump has signed proclamations granting permanent country exemptions to a select number of countries, including Brazil, Canada, the European Union, South Korea, Australia and Brazil.
“The trade ministers have noted with concern the emergence of trade wars which will negatively impact global trade, especially for emerging African countries,” said Davies. Calling the decision by the US to reject SA’s application for import tariff exemption “a travesty”, chief economist for the Steel and Engineering Industries Federation of Southern Africa (Seifsa), Michael Ade, said this would directly cost South African exporters roughly R3 billion worth of steel products and R474 million worth of aluminium products respectively.
“This will not only starve the local industry of foreign currency, but it will also have a negative impact on the country’s foreign reserves. A further disruption to trade will include possible reductions in the quantity of steel and aluminium products exported to the US as local companies seek alternative export markets, thus negatively affecting export competitiveness,” he added.
The punitive tariffs kicked in on June 1, with Ade speculating that the only option currently available for South African exporters was to individually convince their buyers in the US to lobby for exclusions for individual companies from SA on a case-by-case basis, rather than all South African exporters benefiting from a blanket exemption.
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Minister of Trade and Industry, Dr Rob Davies, addressing the Agoa Forum.
