Photo by: Duane Daws
Safeguard duties of 12% have been officially placed on hot-rolled coil (HRC) and plate entering South Africa following publication of the August 11 Government Gazette, which amends schedule two of the Customs and Excise Act.
The safeguard duties have been signed by Finance Minister Malusi Gigaba and will be imposed in addition to the 10% duties already governing the products.
The safeguards, which were approved by the International Trade Administration Commission of South Africa earlier in the year, affect HRC and plate imported from all countries.
The rate of safeguard duty will remain at the 12% level until August 10, 2018.
The 12% duty represents the first year of a three-year safeguard, which South Africa has also communicated with the World Trade Organisation. In the second year, the duty will decline to 10% and, in the third, to 8%.
Given that HRC and plate already enjoy base protection of 10%, the effective duty on steel products would rise to 22% in the first year, falling to 20% and 18% respectively in the two outer years.
ArcelorMittal South Africa (AMSA), which applied for the safeguards, has insisted that the duty will not influence domestic selling prices, which are governed by a pricing agreement on flat steel between the company and government.
However, opposition to the increase in protection remains, with a number of downstream steel consumers indicating that they are not only under threat from imports, but from rising domestic steel prices.
AMSA has promised to work with downstream steel industries to secure protection for products that are increasingly vulnerable to the threat of imports since the introduction of duties on primary-steel products.