-
An employee works at a steel processing production line of a factory.
The local steel industry has condemned the United States’ decision to hike import tax on all steel and aluminium entering that country.
The Steel and Engineering Industries Federation (Seifsa) says this will hurt the steel and aluminium sector in South Africa.
This follows US President Donald Trump’s order to put a 25% import tax on all steel and aluminium entering the US in a major expansion of existing trade barriers.
Trump signed proclamations late on Monday. These measures will take effect on 4 March.
The tariffs will apply to all steel and aluminium imports across the world, including South Africa.
Seifsa President Elias Mongalo says these tariffs will hurt both the US and South African market.
“Anyone who imports steel from South Africa, they are then up for paying. Over and above transport and others, they’re then paying the 25% and 10% respectively for aluminium products, which then means it then becomes more costly. But by doing that, it also then increases the inflation in the US market. So, these are some of the dynamics that were then faced with.”
VIDEO | Experts say US consumers will also end up paying more for goods as a result of the tariffs:
Head of Multi Asset Strategies at Aluwani Capital, Patrick Mathidi says the tariff increase in steel and aluminium products will hurt companies such as ArcelorMittal South Africa.
Recently, the company announced its plans to place its major Newcastle and Vereeniging long steel operations in care and maintenance due to a lack of demand.
“So what’s happening now globally with this latest announcement from the US is that steel stock that will struggle to get into the US because it’s becoming expensive will have to find a home somewhere, which unfortunately means, you know, more competition for ArcelorMittal, because that steel will have to find a market as a cent, so it’s not great news for ArcelorMittal because this means more. You know, sort of a glut of supply coming through where the world’s trying to rate balance and trying to find new markets and then the likes of South Africa being obviously an open economy, it is very likely that we should see a lot of imports coming in, which further undermines the case for ArcelorMittal.”
VIDEO | Government has been engaging ArcelorMittal to avert possible job losses:
