US steel and aluminium tariffs a risk for local jobs – Davies

Cape Town – Recently announced US tariffs on steel and aluminium products could present a risk to local jobs, Trade and Industry Minister Rob Davies has warned.

Davies was briefing the media in Pretoria on Monday about the country’s position on the African Continent Free Trade Area, and the US metal tariffs.

The duties, which came into effect last Friday, include a 10% tariff on the imports of aluminium, and a 25% tariff on imports of steel into the US.

The Department of Trade and Industry had on Friday issued a statement indicating that SA will request to be exempted from the tariffs.

On Monday Davies argued that SA steel and aluminium products accounted for less than 2% of US imports.

“We are a small part of US markets. Our products are not a major part of the overall export market,” he said.

However, a few South African companies will be significantly impacted by the tariffs, putting jobs at risk.

In the case of steel companies, the tariffs will affect niche jobs. The biggest risk of job losses is in the local aluminium sector, he explained.

Davies said that the department conducted a teleconference with US representatives last week Thursday.

US President Donald Trump will take a decision before the end of April on whether SA can be exempted, said Davies.

The US government will consider whether SA companies will be willing to negotiate a quota for steel exports to the US. The US is also interested in finding out how SA is addressing a global steel glut in the market.

The US wants to be assured that if SA is exempted, it will not provide a gateway for the transshipment of products from other countries.

Davies said that the department met with steel companies to be affected by the tariffs on Monday morning. They are willing to make representations to the US government too, he said.

The minister said it was agreed that there would be a second teleconference with US trade representatives where SA could again make its case, along with local steel companies. This would also allow for the US government to discuss further details.

Trade wars

Davies would not comment on the potential of a trade war, considering that SA is set to negotiate with the US government.

“I do not think we will be the target of trade war by the US. But if there is a trade war with someone else -  we will be affected,” he said.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
16.94
(+0.49)
ZAR/GBP
21.16
(+0.41)
ZAR/EUR
19.06
(+0.63)
ZAR/AUD
11.73
(+0.43)
ZAR/JPY
0.16
(+0.68)
Gold
1778.30
(+0.61)
Silver
18.04
(+0.41)
Platinum
806.51
(-1.31)
Brent Crude
42.09
(+1.84)
Palladium
1904.00
(+0.39)
All Share
54617.19
(+1.54)
Top 40
50309.77
(+1.49)
Financial 15
10214.89
(+2.12)
Industrial 25
76156.33
(+1.23)
Resource 10
50768.18
(+1.58)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1538 votes
I am taking a hit, but should be able to recover in the next year
23% - 2000 votes
My finances have been devastated
34% - 3003 votes
It's still too early to know what the full effect will be
25% - 2182 votes
Vote